2030 may seem like an eternity from now, but it's just barely more than a dozen years away. But it's a pretty long period when it comes to investing, as a lot can change across industries and economies.
However, one of the very best ways for the average person to build wealth is to invest in the best companies, and then hold on for the long term. For that reason, we asked three of our top contributing investors to write about a company that they think represents a compelling investment today, while having great prospects to be just as relevant in 2030. They came up with solar-panel technology leader SunPower Corporation (NASDAQ:SPWR), consumer food giant Hormel Foods Corp. (NYSE:HRL), and global beer behemoth Anheuser-Busch Inbev NV (ADR) (NYSE:BUD).
Keep reading to learn why we think these three stocks are great buys today that also have serious long-term staying power.
Shine a light on the future of energy
Jason Hall (SunPower): 2030 is just over a dozen years away, but a major trend has emerged: Renewables such as wind and solar are on track to disrupt the fossil fuels we currently depend on to generate electricity. That's because solar manufacturers such as SunPower are steadily eking more efficiency out of their panels, while manufacturing costs also continue to decline.
Combine that environment with advances in energy storage, and the days of fossil fuels' domination of the energy industry -- at least for power generation -- look numbered. SunPower is very likely to be one of the biggest drivers behind -- and beneficiaries of -- this shift, in both distributed commercial and residential rooftop solar, and utility-scale projects.
One of the big drivers behind this coming disruption is going to be energy storage. Just as with solar panels, the cost of storage is falling, and the technology is getting better. This situation will significantly increase the size of the power generation market renewables can compete in. For SunPower, the benefits of storage are already starting to pay off, with the company expecting to include energy storage with half of its commercial sales as soon as next year.
Food for the times
Reuben Gregg Brewer (Hormel Foods Corp.): We'll still be eating food in 2030. That's one reason to like Hormel Foods Corp., but not a particularly good one. A better reason is the company's focus on managing its portfolio of products. That includes selling off assets without much opportunity for growth, such as salt, and buying businesses that are increasingly in demand, such as Wholly Guacamole.
That's just one example of the company's efforts to shift with the times. It's also expanding its international reach through capital investment, with a new plant in China, and by acquisition, as it just entered South America. Innovation with existing brands is also a key goal. One of my favorite examples is Skippy PB Bites, which turns peanut butter into a carry-along snack. Hormel's innovation goal is to generate 15% of revenue from newly developed products by 2020.
What's most exciting about Hormel today, however, is that investors are down on the shares because of a broad shift in consumer preferences. The current yield is around 2.2%, toward the high end of the company's historical range. There's no question Hormel's results are a little weak right now, but I believe strongly that it will adjust as needed. Note that Hormel has increased its dividend annually for an amazing 51 years. You don't build a record like that by resting on your laurels.
Beer has a bright future
Demitri Kalogeropoulos (Anheuser-Busch InBev): The world should be richer in the year 2030, and the rising prosperity between now and then should do good things for Anheuser-Busch InBev's business. Of course, most investors are aware that the beer giant has a dominant market position in developed economies today. Its Bud Light franchise is by far the best-selling beer in the U.S. in its category, after all.
But international growth promises to be the bigger investment story over the next decade. InBev has a significant presence in developing markets, including China, Nigeria, Mexico, Russia, and India. By 2030, global growth should ensure that these emerging economies account for much more than the 53% of sales they're responsible for today.
Take Africa, for example, where a growing middle class is making the continent a more significant part of the global beer industry. In fact, sales volumes are expected to grow at three times the industry average through 2025.
The African continent is already contributing to InBev's gains by delivering a 20% spike in volume last quarter. I'd expect sparkling numbers like that to show up even more frequently over the next 15 years.
Demitrios Kalogeropoulos has no position in any of the stocks mentioned. Jason Hall owns shares of SunPower. Reuben Gregg Brewer owns shares of Hormel Foods. The Motley Fool owns shares of and recommends Anheuser-Busch InBev NV. The Motley Fool has a disclosure policy.