Last week, the U.S. stock market's three major indexes did what they've seemingly been doing on a regular basis all year: Hit new highs. Yet despite roaring to all-time records, history conclusively shows that it's always a good time to put your money to work in the market.
The big question, as always, is: "Where to invest?" The best answer just might be brand-name businesses. Though brand-name stocks might not offer the growth potential of small-cap companies, you'll often sleep better at night knowing you own stakes in dominant, profitable, time-tested businesses.
If you have $5,000 in cash ready to put to work in the stock market, which won't be needed to cover bills or emergencies, the following five brand-name stocks possess all the tools necessary to make you richer in July, and likely well beyond.
Though it's unlikely to repeat the better than 1,000% gain it's delivered for shareholders over the past decade, payment processing company Visa (NYSE:V) is a brand-name company that consistently makes patient investors richer.
Visa is a cyclical company, which means it's not impervious to inevitable economic downturns. If people and businesses pare back their spending, it'll weigh on Visa's merchant fees. However, the U.S. and global economy spend a considerably longer period of time expanding than contracting. Whereas recessions are measured in months or quarters, expansions often last years, or even a decade. It's a virtual certainty that U.S. and global gross domestic product will climb over time, which favors the Visa operating model.
Also, consider that Visa is strictly a payment processor and doesn't lend. Not lending means not having to set aside cash when credit delinquencies rise during a recession. This is a key reason why Visa bounces back so quickly from economic downturns.
Since a majority of the world's transactions are still conducted in cash, Visa has a very long runway with which to expand its infrastructure to new markets. It's a brand-name stock long-term investors can buy comfortably and not worry about.
Speaking of brand-name businesses with set-it-and-forget-it potential, social media superstar Facebook (NASDAQ:FB) is a high-powered growth and value stock that can deliver for its shareholders for a long time to come.
When the curtain closed on the first quarter, Facebook counted 3.45 billion monthly active users -- 2.85 billion to its namesake site and another 600 million unique visitors to Instagram and/or WhatsApp. For some context, that's 44% of the world's population.
Advertisers are well aware that there's not a social media platform on the planet that comes close to reaching this many eyeballs each month, and will therefore pay whatever is necessary to get their message in front of users. Not surprisingly, Facebook's ad revenue grew by a double-digit percentage in 2020, even during the depths of the coronavirus crash.
As I've previously pointed out, it's a business model that's not even kicked into high gear yet. While it's on pace to bring in north of $101 billion in ad revenue this year, only its namesake site and Instagram are being meaningfully monetized. Once Facebook Messenger and/or WhatsApp are monetized, Facebook will enjoy another surge in sales and profitability.
Don't forget about virtual reality (VR) or augmented reality, either. Facebook is behind the fast-growing Oculus VR devices and could well become a leader in this high-growth space.
Ford Motor Company
Auto stock Ford Motor Company (NYSE:F) is another brand name that can make investors richer. Ford has moved well beyond the issues that threatened the company over a decade ago, and it's looking to capitalize on what could be the single greatest growth catalyst the auto industry has seen in decades: The electrification of global automobiles.
In May, Ford drove home its commitment to electric vehicles (EVs) by announcing its pledge to spend over $30 billion by 2025. The intent will be to bring 30 EVs to market worldwide by mid-decade, as well as to invest in the development and manufacturing of its own batteries. Early indications from sales of the all-electric Mustang Mach-E and reservations for the all-electric F-150 Lightning have been promising.
We might think of the U.S. when Ford is brought into the conversation, but China also represents a massive opportunity for Ford. It's the largest auto market in the world, and by 2035 it's been estimated that half of all new vehicle sales will run on some form of alternative energy. Market share is absolutely up for grabs in China.
If you need more convincing that Ford is worth investing in, consider that its F-Series pickups have been the top-selling vehicle in the U.S. for 39 consecutive years. That's not a typo. Thirty-nine consecutive years. That's performance you can count on.
One of the most intriguing things about CVS has been the company's willingness to grow vertically. In 2018, it acquired insurance giant Aetna. While the deal might have been a bit of a head-scratcher at first, it's designed to yield significant cost synergies over time, as well as pump up CVS's organic growth rate. It also doesn't hurt that Aetna's more than 20 million insured members now have a reason to stay within the CVS Health ecosystem.
Beyond acquisitions, CVS is looking to drum up sales and build loyalty at the grassroots level by opening roughly 1,500 HealthHUB health clinics around the country. The goal for these clinics is to get chronically ill people in touch with physicians or specialists who can help treat their conditions. Ultimately, the rapport CVS builds with these people could lead to repeat visits at its higher-margin pharmacy.
It's worth pointing out that healthcare stocks are generally defensive, too. No matter how well or poorly the U.S. economy is performing, we don't get to control when we get sick or what ailment(s) we develop. This means fairly steady demand and cash flow for major healthcare companies like CVS.
The fifth and final brand-name stock that can make you a lot richer in July and beyond is (drumroll) Amazon (NASDAQ:AMZN). I know, no points for originality.
Amazon has what I'd call a virtually insurmountable competitive edge in the online retail space. According to an April report from eMarketer, it'll be responsible for an estimated 40.4% of all online sales in the U.S. in 2021. The next-closest competitor is more than 33 percentage points behind Amazon. This utter dominance has helped the company sign up more than 200 million people worldwide to a Prime membership. The fees from these memberships help the company offset its low retail margins.
Furthermore, Amazon is a leader in cloud infrastructure services. Amazon Web Services (AWS) controlled an estimated 32% of global cloud infrastructure spending in the first quarter, per Canalys. The margins associated with cloud infrastructure services run circles around retail margins many times over. Thus, AWS is Amazon's ticket to considerably higher cash flow and profitability in the years that lie ahead.
Amazon might be near an all-time high, but a strong case can be made that it's headed to $10,000 by mid-decade.