Imagine this: You walk out to the mailbox expecting the usual deluge of bills and junk mail -- only to be greeted with a lovely surprise: an actual check for $10,000!
So, let's take this daydream a little further, shall we? What would be the best way to invest these 10,000 smackers? Let's have a look at a hypothetical three-stock portfolio that I think could really pay off.
Image source: Getty Images.
Exxon Mobil
First off, I'd look at Exxon Mobil (XOM 1.42%). While 2023 hasn't been a fantastic year for the oil and gas giant -- the stock's total return is only 8% year to date -- Exxon Mobil still deserves consideration from income-oriented investors.
That's because despite long-term efforts to shift toward renewable energy sources, the world continues to rely on crude oil and natural gas right now -- as well as for the foreseeable future. Indeed, according to estimates, more than 50% of the world's energy produced in 2019 came from crude oil or natural gas (with a further 27% coming from coal).
That resilient demand, coupled with low production and even lower crude oil inventories (the U.S. Strategic Petroleum Reserve is at the lowest levels in almost 40 years), has kept the price of crude oil in a $70 to $90 range for more than a year -- producing excellent profits and cash flow for ExxonMobil.
The company generated $134 billion in gross profit over the last 12 months and almost $68 billion in operating cash flow. The stock boasts a 3.2% dividend yield, and trades with a price-to-earnings (P/E) ratio of only 9 -- about half its five-year average of 17.
So, for value investors, ExxonMobil looks like a stock worth considering.
Shopify
Next up is Canadian e-commerce company Shopify (SHOP 1.61%). What's appealing about Shopify is that it seems back on track after a disappointing 2022 forced some much-needed changes.
Earlier this year, management sold off its logistics business and trimmed its headcount to reduce costs and boost profitability. Those efforts
paid off, with Shopify returning to quarterly profitability for the first time since 2021.
What's more, the company isn't sacrificing growth in its effort to rein in costs. Revenue over the last 12 months jumped to $6.3 billion, with quarterly revenue growing at more than 30% year over year.
SHOP PS Ratio data by YCharts
Better still for investors, shares trade at a price-to-sales ratio of 11. That's far below the company's long-term average of 27. And while Shopify stock isn't for everyone, growth-oriented investors should remember the name given its high-octane potential.
Microsoft
Finally, Microsoft (MSFT -1.00%) rounds out the list. The software giant is America's second-largest company, and simply too good to ignore.
Consider that a $10,000 investment in Microsoft made five years ago would be worth $28,910 today. That's a total return of 189%, or a compound annual growth rate of 24%.
MSFT Total Return Level data by YCharts
And it's not shocking when you think about the strength of Microsoft's business. The company is a top player in the lucrative cloud-computing market, it has a valuable gaming segment, and its Windows and Office software is ubiquitous.
Even so, investors can still snap up shares today at a reasonable valuation. The stock trades at a P/E multiple of 32. That's right at its three-year average. Given Microsoft's strong and diversified business segments and its exemplary management history, the company is one every investor should consider owning.
