It is possible to earn excellent returns in the stock market without taking big risks. It's often the best -- and, therefore, lowest-risk -- businesses that generate the highest long-term returns for their investors.
To help you in your search for these fortune-builders, here are three stalwart companies that can help you protect and grow your wealth.
1. Microsoft
Diverse revenue streams and a fortress-like balance sheet make Microsoft (MSFT 1.82%) one of the least risky investments in the tech world. The software giant holds lucrative positions in key markets like computer operating systems, productivity apps, and cloud computing. Yet it's Microsoft's formidable presence in artificial intelligence (AI) that has investors most excited.
The worldwide market for AI products and services will top $1.8 trillion by 2030, according to Statista. Microsoft's multibillion-dollar investment in ChatGPT maker OpenAI vaulted the tech titan to the vanguard of the AI race. Microsoft has since worked quickly to integrate cutting-edge AI into its popular productivity tools and Bing search engine. Additionally, booming demand for AI model training and applications is boosting the growth of Microsoft's Azure cloud computing platform.
Microsoft's staggering profitability also helps to reduce the risks for investors. With over $70 billion in profits over the trailing 12 months, Microsoft has more than enough cash to fund its operations and research and development program while still rewarding its shareholders with dividends and stock buybacks.
2. Apple
Like Microsoft, Apple (AAPL -0.35%) is a moneymaking powerhouse. The iPhone maker's $167 billion in cash and investments as of July 1 and roughly $100 billion in annual profits give it an unrivaled level of financial fortitude.
Apple's edge lies in the seamless integration of its well-designed hardware and software. A thriving ecosystem of more than 2 billion installed devices and 1 billion paid subscriptions creates a lucrative stream of recurring revenue. Once someone buys an Apple device, they typically remain a loyal customer. And the company's services -- such as Apple Pay, iCloud, and Apple Care -- are already on pace to produce $85 billion in high-margin sales annually.
Incredibly, with massive markets like India still largely untapped, these figures are likely to head even higher in the coming years. Consider buying shares of Apple today, and you can position yourself to profit alongside this proven wealth creator.
3. Mastercard
Unlike banks that are exposed to loan defaults, credit risk is not an issue for Mastercard (MA 0.07%). The payment processing leader operates more like a tollbooth by earning a fee from each transaction that it facilitates. And those fees add up to billions of dollars in profits for Mastercard and its shareowners.
The proliferation of mobile devices and the growth of e-commerce are driving a shift from cash payments to digital transactions. As a leading credit and debit card network, Mastercard (MA 0.07%) is well-situated to benefit from these trends.
With an operating margin of over 50%, Mastercard is already highly profitable. It enjoys enviable scale advantages from its 3.2 billion payment cards in use around the world -- and more than $8 trillion in annual gross dollar volume -- that its smaller rivals simply can't match. This embedded position within the global economy should continue to serve Mastercard and its shareholders well in the years ahead.
