Are you looking for new names to own for the long haul? There's a universe of them to choose from. And, that's the problem. There's a universe of stocks to choose from! It would be much easier to narrow your options down to a (much) smaller set of prospects.
Well, consider that task done. If you're looking for a short list of new stocks to consider buying, the 30 tickers that make up the Dow Jones Industrial Average (^DJI +0.75%) are all promising blue chip names. Here are three of the best long-run Dow stocks to dive into at this stage of the young bull market.
Visa
Visa (V 0.02%) is of course the world's biggest card-payment network. The 4.3 billion Visa cards collectively held by its worldwide customers can be used at more than 130 million places, allowing the company to process 276 billion transactions last year facilitating $14.8 trillion worth of purchases and cash transfers. This activity in turn produced $32.7 billion worth of revenue for the company itself. And best of all, each of these numbers has been consistently growing for years now.
V Revenue (Quarterly) data by YCharts
There's room for plenty more growth ahead though. In fact, there's arguably room for perpetual growth.
It's clear that cards have largely displaced checks and cash as the preferred means of paying for goods and services. The Federal Reserve reports debit and credit cards now handle on the order of 60% of purchases made within the U.S., with consumers using cards nearly twice as often as they use cash. Oh, people are still using cash... and checks. These two alternatives handle a little more than 20% of consumer purchases in the United States, with sometimes-awkward options like bank transfers making up another 20% of payments. Cash is even more commonly used outside of the U.S. Domestically and abroad though, many of these transactions could be more easily handled by a card company like Visa.
The thing is, this shift is clearly underway. Analysts expect Visa's top line to improve to the tune of 13% this year and by another 10% next year, easily outpacing overall economic growth. Throw in the ongoing growth of commerce infrastructure in less-developed markets in addition to sheer population growth, and what you've got is a long-term opportunity to extend these near-term growth rates.
Perhaps the most exciting reason to own Visa stock for the long haul, however, is that the company operates several independently operated innovation centers all over the world. These centers are charged with nothing other than building and expanding ecosystems that encourage more frequent usage of its credit and debit cards. This sort of forward-looking effort is actually a pretty big deal.
Amazon
Amazon (AMZN +1.07%) isn't just the biggest e-commerce name in the business -- at least in the Western Hemisphere -- it's also a cloud computing powerhouse. Synergy Research Group reports Amazon Web Services accounted for a market-leading 31% of worldwide spending on cloud computing service in the fourth quarter of 2023. Amazon is even a force to be reckoned with on the streaming front, with numbers from JustWatch indicating Amazon Prime Video's share of the U.S. streaming market eclipsed Netflix's reach during the first quarter of the year.
It's not what Amazon is, though, that makes it such a hot prospect. It's what it isn't... yet.
NASDAQ: AMZN
Key Data Points
As difficult as it may be to believe, e-commerce is still a relatively small piece of the United States' retail market. The Census Bureau says only about 15% of this country's retail spending is done online, and Amazon itself only accounts for a little less than 40% of the nation's e-commerce industry. Certainly there's some of this spending that will never make its way online, if only because it would be too impractical. A big chunk of the $946 billion worth of consumer spending being done every year in the U.S. could be moved online though, setting the stage for an enormous growth opportunity for Amazon.
And that's just within the United States. The company's making e-commerce revenue and profit progress overseas as well.
Here's the thing -- Amazon wouldn't even need to capture the bulk of this other business that's up for grabs to continue its phenomenal success. Just driving a few more new shoppers to the site in the years ahead could prove a boon.
While Amazon.com started out as a simply online shopping platform, it's since evolved. It's now an advertising platform as well, collecting $46.8 billion worth of high-margin ad revenue last year from third-party sellers looking to prominently feature their products on the site. That's a 24% improvement on 2022's advertising business, yet this growth still only scratches the surface of the opportunity. eMarketer says the nation's entire retail media ad business should more than double between now and 2027, when it will be worth nearly $110 billion. Amazon already controls the vast majority of this market, and will likely still be in the distant lead at the end of that time frame.
The bigger point is, the e-commerce giant has plenty of growth levers to pull in the near and distant future.
JPMorgan Chase
Last but not least, add JPMorgan Chase (JPM +0.11%) to your list of Dow stocks to own for the long run.
Anyone keeping tabs on this stock probably knows shares tumbled following (and even a little before) the release of its first-quarter numbers just a few days back. Although sales and earnings both topped estimates, the megabank's decision to not raise its net interest income guidance for 2024 rattled shareholders. Credit card charge-offs were up while total deposits were down as well, further jarring investors. End result? JPMorgan shares are now down 10% from March's high.
NYSE: JPM
Key Data Points
This sell-off, however, ignores a couple of key details about JPMorgan Chase's foreseeable future.
The first of these details is that the company is seeing strong signs on several important fronts. Take its capital markets business as an example. Although transaction revenue is still a bit suppressed, investment banking fees were up 21% year over year during the first quarter, in step with the industrywide rebound in fundraising and dealmaking; both Bank of America and Morgan Stanley also saw a pronounced uptick in corporate fundraising that could portend a prolonged period of strong dealmaking demand. Ditto for Goldman Sachs, prompting Goldman's CEO David Solomon to interpret his company's Q1 IPO activity as a sign that "we're in the early stages of a reopening" of this market.
And what other detail is seemingly being missed here? It's just possible that JPMorgan Chase is being far more conservative with its interest income outlook than it needs to be.
Persistent inflation is forcing the Federal Reserve to postpone and dial back its plans to lower interest rates this year, but a reasonably healthy economy is forcing consumers and corporations alike to forge ahead with their borrowing and spending plans anyway. In many ways it's the proverbial perfect storm for most facets of the banking business, by virtue of creating economic activity that ultimately drives deposits, loan originations, and demand for investing services.
