Robinhood Markets (HOOD 2.56%) shook up the financial services industry by offering "free" unlimited stock trading and a mobile-first approach. The changes helped to democratize investing over the past decade.
While the buzz around Robinhood has faded since its peak during the pandemic, the trading platform still carries significant influence, especially with millennials -- the age of the average account holder is estimated to be just 31.
Robinhood also shares a regularly updated list of the 100 most popularly held stocks among users of the platform, making it easy for investors to know what stocks younger investors and Robinhood traders like. That list has some interesting (and questionable) stocks on it, along with plenty of good stocks worth a closer look.
Here are three popular Robinhood stocks investors might want to consider buying and holding forever.
1. Airbnb
Like Robinhood, Airbnb (ABNB 1.74%) disrupted an industry, making home-sharing a mainstream concept in the travel sector and forcing hotels to adapt their business models. Airbnb is pursuing an addressable market valued in the trillions of dollars, and it still holds a majority of the market share in home-sharing thanks to strong name recognition, network effects, and a first-mover advantage.
Those strengths helped Airbnb gain significant market share during the pandemic, and the company should be able to outgrow the overall travel industry as more of the market moves from hotels to home-sharing.
Airbnb also continues to improve its platform, recently launching a number of changes with its summer update. Those changes include new ways to get to know your host before you book, the ability to see check-out instructions before you book, and full price transparency when you scan for places to stay, rather than discovering hidden fees (like cleaning fees) after you've already booked.
Airbnb stock pulled back after its recent earnings report. Investors were turned off by the company's guidance as it laps the recovery from pandemic-related issues a year ago -- but the 12%-16% revenue growth it's calling for isn't shabby, and the stock looks relatively reasonably priced at a price-to-earnings ratio of 36.
Airbnb's profitability should continue to improve, and its competitive advantage should support its long-term growth.
2. Walt Disney
Walt Disney (DIS 1.25%) is at a crossroads these days. The entertainment giant made a big bet on streaming just as its high-margin legacy business is facing the prospect of an accelerating decline in revenue. Disney stock fell sharply on its latest report in part because it continues to lose money on streaming -- which profits from its broadcast and cable channels -- and because studio entertainment businesses are declining.
However, even as it faces challenges, Disney still has a number of undeniable competitive advantages. Its library of intellectual property is unrivaled, spanning animated classics from Snow White to modern blockbusters like the films in the Marvel Cinematic Universe series.
Additionally, Disney's theme parks remain a fast-growing, high-margin business that plays a key role in Disney's flywheel business model. Content and characters that first debut on the screen find their way into theme park rides and consumer products like toys, instilling customer loyalty and building brand affinity.
Disney's streaming business should eventually reach profitability, as it recently raised prices and is focused on cutting costs. If it can manage the transition to streaming successfully, the stock has a lot of upside potential from here.
3. Realty Income
Switching gears, you might be surprised to find that Realty Income (O 0.07%) is on Robinhood's list of the 100 most popular stocks.
As a real estate investment trust (REIT), Realty Income is a reliable dividend payer, currently offering a 5.1% dividend yield. While the stock isn't going to blow anyone away with its growth rate, it's a reliable income stock and its business model gives it a number of competitive advantages.
The company focuses on single-tenant properties and triple-net leases, meaning its tenants pay for property taxes, maintenance, and insurance, alleviating a significant part of the risk involved in being a landlord.
Renting single-tenant properties also gives the company more control as a landlord, and it generally rents to recession-resistant tenants like 7-Eleven, Dollar General, and Walgreens, which sell products that consumers need no matter the state of the economy. Companies like Dollar General are also rapidly expanding.
Finally, Realty Income is also unique as a monthly dividend payer. If you're looking for steady growth in profits and dividend payouts, it's hard to beat Realty Income.
