Robinhood is now a widely recognized brand in the finance world, especially among young investors. However, its gamified platform has drawn criticism, including harsh words from Warren Buffet and a rebuke from FINRA, as it seems to incentivize frequent trading and risky investment strategies.

Indeed, a handful of meme stocks rank highly on Robinhood's Top 100 list. But these risky bids are balanced by a few high-quality ideas. For instance, PayPal Holdings (NASDAQ:PYPL) and Walt Disney (NYSE:DIS) both made the cut, and these Robinhood stocks look like smart long-term investments. Here's why.

Investor engaging with the Robinhood mobile app.

Image source: Getty Images

1. PayPal

PayPal's mission is to democratize financial services. To that end, its platform connects consumers and businesses in over 200 markets, enabling digital and mobile payments both in-store and online.

In 2018, PayPal acquired European fintech iZettle, a provider of point-of-sale software and hardware. In June the company brought PayPal Zettle to the United States, giving small businesses access to omnichannel commerce tools for payment processing, inventory tracking, and reporting.

This system also allows merchants to accept PayPal QR Code payments, a feature launched during the pandemic to limit contact at checkout. PayPal has already seen strong adoption here. During the Q1 earnings call, CEO Dan Schulman indicated that nearly 1 million merchants have signed up for the service.

More broadly, PayPal is executing on a strong growth strategy across its digital and mobile wallets: In the past 12 months the company launched the Venmo credit card, support for cryptocurrency, and a "buy now, pay later" option for consumers. All of these efforts have powered growth in active accounts and engagement, driving strong top-line momentum.

Metric

2019

Q1 2021 (TTM)

CAGR

Active accounts

305 million

392 million

22%

Payment transactions

12.4 billion

16.5 billion

26%

Revenue

$17.8 billion

$22.9 billion

22%

Data source: PayPal SEC filings, Ycharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

Looking ahead, e-commerce and digital payments should continue to disrupt the retail and finance industries, and both trends should be growth drivers for PayPal. Moreover, the debut of PayPal Zettle in the U.S. expands the company's omnichannel presence, positioning it to compete more directly with Square.

Finally, PayPal's scale and trusted brand name give it an edge over rivals, and both should help the company maintain its momentum in the years ahead. That's why this Robinhood stock looks like a smart buy.

2. Walt Disney

Walt Disney is one of the oldest and most prolific entertainment companies in the world. But on the surface, the Magic Kingdom appears to be crumbling. In the first half of 2021, revenue dropped 18% and cash from operations plunged 69% compared to the prior year. Fortunately, there's a simple explanation: Movie theater and theme park closures have hit the House of Mouse hard. But those effects should be temporary.

Digging a little deeper, the bull case for Disney becomes more apparent: First and foremost, its intellectual property (IP) is unmatched. In fact, Disney has produced seven of the top 10 grossing movies of all time. And a recent report by Solutions Research Group ranked Disney-owned ABC, Disney+, Hulu, and ESPN in the top 10 U.S. TV brands.

People with their hands in the air at the top of a rollercoaster.

Image source: Getty Images

Likewise, Disney owns some of the most popular theme parks and resorts in the world. And the company uses its extensive IP to create immersive experiences that fans can't find anywhere else. For instance, Avengers Campus recently opened at Disney California Adventure, allowing guests to live a day in the life of a Marvel superhero.

Finally, under CEO Bob Chapek's management, Disney has adapted quickly to the demise of linear TV. Since launching in 2019, its flagship streaming service Disney+ has amassed over 103 million subscribers, and Hulu and ESPN+ boast an additional 42 million and 14 million paid members, respectively.

Through the first half of 2021, direct-to-consumer (DTC) revenue surged 65%, driven by the success of original series like The Mandalorian and WandaVision, as well as films like Soul. But there's still plenty of room for growth.

According to eMarketer, Disney's three streaming platforms will generate $12.4 billion in U.S. subscription sales by 2022 -- just shy of the $13 billion that Netflix is projected to take. In other words, Disney is well-positioned to surpass Netflix domestically by 2023.

Here's the big picture: Content is king in the entertainment industry, and Disney has been producing award-winning content for over a century. That advantage should be a powerful growth driver for its DTC business. And as theme parks and movie theaters continue to reopen, Disney's top line should see a meaningful bump in the coming quarters. That's why now looks like a good time to buy this Robinhood Stock.

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.