Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

2 Robinhood Stocks to Buy and Hold for Decades

By Will Ebiefung - Dec 29, 2020 at 8:24AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Long-term investing is the key to massive returns in the stock market. Is your portfolio positioned to benefit?

A decade is enough time to make life-changing gains in the stock market. And while many Robinhood investors gravitate toward high-risk stocks without track records of success, others are betting on companies with the potential to win over the long term.

Let's explore the reasons why Walt Disney ( WMT -2.18% ) and Walmart ( DIS -1.80% ) look good enough to buy and hold for decades. 

1. Walt Disney 

Known for legendary intellectual property like Star Wars and Marvel Studios, Walt Disney is ideal for investors looking to future-proof their portfolios. The company is bouncing back from the impact of the coronavirus pandemic. And over the long term, its pivot to streaming could unlock value for shareholders for decades to come because of its potential edge in original content.

Image of stopwatch on U.S. currency

Image source: Getty Images.

Disney's fiscal fourth-quarter revenue fell 23% to $14.7 billion because of weakness in its amusement park and studio entertainment segments, which are down by 61% and 52%, respectively. The company is still suffering from reduced visitor traffic to its resorts and disrupted theatrical releases.

Despite the challenges, Disney's fourth-quarter result is a dramatic improvement from the third quarter, when revenue was down 42% against the prior-year period. And investors can expect the recovery to accelerate as coronavirus vaccines become more widely available to the public.

Over the coming years, Disney's streaming business is on track to become its key growth engine. Disney+, Hulu, and ESPN+ boast a combined total of 121 million subscribers, and CEO Bob Chapek expects that number to soar to 230-260 million by 2024. To put that in perspective, rival Netflix has 195 million subscribers and generated a profit of $1.87 billion in 2019. Management credits Disney's streaming success to the strength of its intellectual property and "unparalleled" brands.

2. Walmart 

Walmart is the world's largest company by revenue, with sales of $524 million in fiscal 2020. And it didn't get there by accident. The supermarket retailer is known for its quality goods and low prices. And its stock is an excellent pick for long-term investors because of the company's pivot to online grocery shopping, where it enjoys a competitive advantage thanks to its trusted brand and logistics infrastructure (next day delivery is available to 75% of the U.S. population).

The coronavirus pandemic has accelerated the consumer shift toward online shopping. And Walmart was quick to capitalize on this trend by rolling out its Walmart Plus subscription service in the fiscal third quarter. So far, the platform has enjoyed a warm reception with consumers, with research firm Piplsay estimating that 11% of Americans subscribed within two weeks of its launch. 

Management hasn't provided specific subscriber data for Walmart Plus as of the company's most recent earnings call, but the company's impressive e-commerce growth rate seems to speak for itself. 

Third-quarter revenue grew by 5.2% to $134.7 billion, while U.S. e-commerce sales jumped 79%. The company's pick-up and delivery service, which is geared toward grocery shopping, grew by triple digits in the period. E-commerce only represented $10.3 billion of Walmart's U.S. sales, so the business is a tiny fraction of revenue right now. But in the coming years, e-commerce can help drive long-term growth and stave off competition from rivals like Amazon.com.

Betting on strong brands and megatrends 

One thing Walmart and Walt Disney have in common is their strong brands. Walmart has served customers since 1962, while Disney has been around since 1923 -- a staggering 97 years. Both companies have built a rock-solid reputation with consumers, which may help them beat back competition as they pivot to new growth drivers over the coming decades. 

 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$137.57 (-2.18%) $-3.06
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$142.29 (-1.80%) $-2.60
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$3,454.11 (-1.51%) $-52.95

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.