We all want to choose stocks today that will lead to riches down the road. What do I mean by riches? In some cases, your initial investment may double or triple over the long haul or you may even reach the millionaire mark. In any case, as long as you grow your money over time, you've scored a win and taken major steps toward financial freedom.
Now the big question is where to get started along this path to riches. Smart investors know the backbone of a get-rich strategy involves investing in companies with a track record of success and solid prospects ahead -- and, importantly, hanging on to these players for the long term. Ideally, you'll build a portfolio of 25 or more stocks and hold onto them for at least a decade. Here are three that, over time, could make smart investors rich.
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1. Eli Lilly
Eli Lilly (LLY +2.57%) has built a solid track record of earnings growth thanks to its portfolio of drugs in areas including diabetes, cancer, immunology, and neuroscience. And just recently, the big pharma player added a new potential blockbuster to that list when the U.S. Food and Drug Administration (FDA) approved Zepbound, a weight management treatment.
NYSE: LLY
Key Data Points
Zepbound is actually the same molecule as Lilly's diabetes drug Mounjaro, which quickly became a blockbuster as doctors not only prescribed it for that indication -- but also for weight loss patients. And, in recent times, drugs used for weight loss have become so popular that there haven't been enough doses to go around. If Lilly is able to produce enough product to fulfill most of the demand, we should expect significant growth from Zepbound.
But you'll like Lilly for more than just one drug. The whole portfolio is spurring growth, with revenue in the most recent quarter climbing 37%. These growth drivers should lift earnings well into the future and that's great news for today's investor.
2. Amazon
Amazon (AMZN +0.26%) is a leader in the high-growth markets of e-commerce and cloud computing -- and is making the right moves to maintain its dominance. When the company faced the headwinds of a tough economy last year, it revamped its cost structure, and those moves are now bearing fruit.
In the most recent quarter, Amazon reported growth in net sales, net income, free cash flow, and other key financial measures. What did Amazon do to turn things around and favor long-term growth? In e-commerce, the company worked to become more efficient, for example cutting down delivery time and distance by shifting to a regional fulfillment system from a national one.
NASDAQ: AMZN
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As for cloud computing, Amazon Web Services (AWS) made big investments in artificial intelligence (AI) to better serve clients who want to use AI -- but don't want to build a system from the ground up. AWS offers them foundation models, for example, that they can customize for their own projects.
All of these efforts are helping Amazon today and should continue to help this company hold onto its market-leading position over time.
3. Carnival
Carnival (CCL +6.99%) (CUK +6.89%) shares have climbed in recent times and for good reason -- demand for the company's cruises has taken off, and the cruise leader reported record-high revenue in the recent quarter.
The company also has made progress in tackling its biggest problem: the wall of debt it built up during early pandemic days, when ships couldn't sail. Carnival has been reporting growth in adjusted free cash flow, expects this to continue, and will use this to pay down debt. It already paid off about $4 billion since the start of this year.
NYSE: CCL
Key Data Points
Carnival's moves to improve the efficiency of its ships and cut down on fuel costs also should boost growth down the road. The company has replaced older ships with newer fuel-efficient ones and has designed routes that reduce fuel needs.
Finally, as I mentioned, Carnival is benefiting from an increase in customer demand, and these travelers even are willing to pay more for cruises than they have in the past. This, along with Carnival's cost savings efforts should make the world's biggest cruise operator a winner -- and investors winners -- over the long term.
