Which Stock Wins Over the Next 10 Years?

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I need your help. Last quarter I opened a real-money portfolio for my two young daughters, and they bought their first stock in Starbucks. The rationale was simple: It's a brand they see every day, they understand what it does, and they think it'll be around when they go to college in 10 years. Now it's time to add another stock to their portfolio, and this is where you come in. We've whittled it down to four finalists:

Amazon.com (Nasdaq: AMZN  )
Amazon seems to be going in all sorts of directions these days, but at its core Amazon is a retailer, and my kids understand that. We buy all sorts of things from Amazon and love the free two-day shipping and videos thanks to Prime. My oldest has the Kindle Fire, the younger expects one soon, and my wife and I both love to read on our Kindles.

Amazon's margins are razor-thin thanks to continued spending as it expands its reach. But if its strategy works and offerings like the rumored same-day delivery are successful, profitability could get a serious boost, taking the share price along with it. Either way, I imagine Amazon will continue to play a big part in all our lives for years to come.

Nike (NYSE: NKE  )
It could be argued that Nike doesn't resonate quite as much with my daughters' generation as it did with mine. There are certainly plenty of options out there in sporting goods and apparel. But the Swoosh is still a global phenomenon, and I don't see that changing.

Nike is a mature company at a $42 billion market cap, but the opportunity in Asian and emerging markets continues to grow. Just last year, almost 30% of revenues came from these regions, versus about 20% in 2008. Neither daughter owns any Nike gear yet, but that's bound to change soon.

Walt Disney (NYSE: DIS  )
This seems like the biggest no-brainer in history. Disney has been a part of these girls' lives since Day One. I think we have every princess in the book, and the Disney Channel is the most popular channel in the house. ABC, ESPN, and Pixar are all phenomenal pieces of the pie as well, and to top it all off, we just booked a trip to Orlando this fall for their second visit to the Magic Kingdom.

The fascinating thing about Disney is that it's utterly timeless. It was a big part of my life as a kid. Now it's a big part of my life as an adult because of my children. And this cycle just continues to play out generation after generation. Given that the company recently recognized its 56thconsecutive year of dividend payments to shareholders, Disney might need to become a part of their portfolio sooner rather than later.

Apple (Nasdaq: AAPL  )
I'd be lying if I said we have only a few Apple products in our house. Between the iPads and iPhones my wife and I have (not to mention the assortment of iPods and a MacBook Air), my girls know Apple and its place in the world. And there's no question it will be a big part of their world for years to come.

My biggest question on Apple is in regard to growth. Granted, the stock is up more than 8,300% over the past 10 years. But at close to $600 billion in market cap, the company will have to do something really special for the stock just to double from here. Is it the best option today? I don't know that it is.

It's time to tweet
There you have it; our Foolish final four. And as I said, I need your help. Last quarter, I got a tremendous response from folks all over Twitter, and it worked so well I want to do it again. So link to my Twitter feed and tell me in 140 characters or fewer which stock needs to be our next purchase. And if you're lucky, your Tweet may be featured in a follow-up piece (or two) right here on fool.com.

Jason Moser is an analyst with Motley Fool One and Stock Advisor. He owns shares of Amazon.com and Starbucks. The Motley Fool owns shares of Apple, Walt Disney, Starbucks, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Apple, Walt Disney, Amazon.com, Starbucks, and Nike, writing covered calls on Starbucks, creating a diagonal call position in Nike, and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (12)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 24, 2012, at 2:08 AM, iParadigm2watch wrote:

    No question "Apple will be a big part of their world for years to come" is the truest sentence in the article.

    Almost touched on it. The paridgne shift. Android will loose market share. Windows is never going to change, catch up. It will be astounding, what Apple will do for years into the future. Pundits are every ware. They have been slighting Apple for years, all along! The paridgne shift is on. "All" the Teens, the Tweens, 20 something's and Boomers will ditch their Android and whatever else as they mature and buy Apple. 500 million+ devices in the wild by 2Q! 2015. Does not seem so far fetched anymore. :-)

  • Report this Comment On July 24, 2012, at 12:01 PM, NoviceStocker wrote:

    I work in the education field. School districts all over the country are in the process of creating one-to-one computing for their students. That means millions of new iPad sales and Apple TV. In a few years all this stuff will need to be up upgraded. I say Apple is the winner.

  • Report this Comment On July 24, 2012, at 12:50 PM, StopPrintinMoney wrote:

    Any Dow 30 stock will serve your need.

    However, (IMO) picking the stock based on familiarity with its brand is silly.

    It's very important to consider the market environment before buying into multinational stocks. I understand you're in the long run, but nothing less than discouragement will come up if your picks take a nosedive in the short- to mid-term.

  • Report this Comment On July 24, 2012, at 11:19 PM, TempoAllegro wrote:

    The way to find the answer is the same way Buffet reasoned with Coke -if given enough money, could you take away that company's leadership position?

    I would argue that the two tech-oriented companies are too precarious for a long-term portfolio because things can change too quickly and they need constant tending to. Nike has a large moat, true, but there are competitors who could possibly take it on, given enough money.

    The answer is Disney. It has NO true competitor. And if I gave you all the money in the world, you could never replace it! It has a unique and appealing set of properties. A true no-brainer!

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