There's arguably no greater wealth creator on the planet than the stock market. Though other assets have had short periods where they've outperformed, the historical long-term average annual return of 7% for the market, inclusive of dividend reinvestment, is unmatched.
The formula for getting rich investing in the stock market is pretty simple. You need to buy innovative companies with lasting competitive advantages and, most importantly, hang onto those businesses for very long periods of time. That's how Warren Buffett became one of the wealthiest investors on the planet. It can work for you, too.
If you're ready to get rich, you should strongly consider buying the following five moneymaker stocks right now.
Businesses were steadily moving online and into the cloud even prior to the coronavirus pandemic. Since the pandemic completely upended societal habits and the traditional work environment, online traffic has soared. Fastly (FSLY 0.47%) is loving every minute of it.
Fastly, which helps content reach end users quickly and securely, has seen steady upticks in total customer count, enterprise customer count, and average spend per enterprise customer. Most importantly, the company's dollar-based net expansion rate hit 147% in the third quarter. In plainer English, anything over 100% signifies expansion. What this figure tells us is that the company's existing clients are seeing a big uptick in traffic, which is resulting in significant revenue growth for Fastly. Existing client growth is the company's golden ticket to high margins and recurring profitability.
Fastly's also done an impressive job of securing big-name clients. It handles traffic for Pinterest, Wayfair, Yelp, and Shopify, to name a few heavily trafficked sites. The point is that Fastly's sales growth is sustainable and just beginning. Look for a tripling in sales by 2024, if not sooner.
Many moneymakers can be found among drug stocks. Long-term investors wanting to get rich should look closely at Exelixis (EXEL 0.05%).
Exelixis generates the bulk of its revenue from cancer drug Cabometyx, which is approved to treat first- and second-line renal cell carcinoma (RCC) and advanced hepatocellular carcinoma (HCC). Combined, RCC and HCC give Exelixis the opportunity to bring in more than $1 billion in sales this year.
But the company isn't anywhere near done. It's testing its lead drug in more than 70 clinical trials as both a monotherapy and combination treatment. One of these studies (CheckMate 9ER) involved combining Cabometyx with key rival Opdivo (made by Bristol Myers Squibb) to treat first-line RCC. The combination therapy met its primary endpoint with flying colors. Label expansion opportunities like this should allow Cabometyx to be a long-term cash cow for Exelixis.
Speaking of cash, Exelixis has a lot of it. It ended September with nearly $1.2 billion in cash and can generate north of $400 million in operating cash flow a year. It will be a growth machine for a long time to come, or it will be bought out for a handsome premium.
Patient investors could also make bank with Canadian licensed marijuana producer OrganiGram Holdings (OGI -2.50%). Though OrganiGram has had early struggles like most Canadian pot stocks, it also offers clear-cut competitive advantages.
The first thing you'll note about OrganiGram is that it operates a single facility (Moncton) in New Brunswick. Having a single cultivation and processing site makes it a lot easier for OrganiGram to adjust its output and spending to meet market conditions.
Secondly, the company employs a three-tiered growing system at its indoor facility. Maximizing its licensed space will improve yields and should help drive production costs down.
Third, OrganiGram focuses on derivative pot products. Derivatives like edibles, vapes, and infused beverages have much higher margins than dried cannabis flower. OrganiGram has invested in automated technology capable of producing up to 4 million kilos of infused chocolates each year, and it also developed a proprietary powder that can be added to drinks.
OrganiGram is the best-positioned Canadian marijuana stock.
Another absolute moneymaker that's shown it's always worth buying is payment facilitator Visa (V 0.15%).
Although Visa isn't immune to recessions, it has history on its side. Recessions and economic contractions tend to be short-lived, while periods of economic expansion last much longer. When the U.S. and global economy are expanding, businesses and consumers are freely spending. Buying Visa stock gives you a very simple and smart way to take advantage of economic growth over time.
Visa's impressive long-term performance also reflects its avoidance of lending. By strictly working on the processing side of the equation, Visa avoids the direct pitfalls of economic contractions and recessions (i.e., credit delinquencies and charge-offs). Processing payments has consistently led Visa to profit margins above 50%.
Considering that large swaths of the world remain underbanked -- the Middle East, Southeastern Asia, and Africa -- Visa's growth rate is sustainable for a long time to come.
Lastly, long-term investors can get rich by riding the coattails of surgical systems developer Intuitive Surgical (ISRG -0.06%).
For the time being, Intuitive Surgical is effectively a monopoly in the robotic surgery space. It's placed 5,865 of its da Vinci surgical systems worldwide over the past 20 years, which is far more than all of its competitors on a combined basis. Having built up rapport with surgical centers and hospitals, the company is unlikely to lose clients to any of its competitors.
Intuitive Surgical's business model is also built to improve over time. Early on, most of its sales were derived from selling its pricey da Vinci systems. Unfortunately, these are intricate and costly to build, so they only produce mediocre margins. However, the bulk of Intuitive's revenue today comes from substantially higher margin instrument sales and the servicing of these systems. As the number of da Vinci systems installed increases, the percentage of sales derived from its higher-margin segments will, too.
Getting rich isn't difficult if you pack your portfolio with high-quality businesses.