Has this manic market turned you into more of a trader and less of a true buy-and-hold investor? You’re not alone. The environment has recently rewarded certain short-term trades, and obscured what we can reasonably expect from the future.
Winning investment philosophies haven’t been altered, though. This is still a game ultimately won by the people willing to ignore the noise, buy quality stocks, and stick with those positions for years on end.
With that as the backdrop, here’s a rundown of three quality picks that are not only safe enough to own for the long haul, but also potent enough to dish out surprisingly strong gains.
You know the company. In fact, the whole world knows the company. Consulting company Interbrand rates McDonald’s (NYSE:MCD) the ninth-most valuable brand of 2020, jibing with other, similar rankings that peg its golden arches as one of the world’s most recognizable logos. That’s huge for a restaurant chain in constant competition with other chains.
Investors looking at McDonald’s as a fast-food play, however, are looking at the company all wrong. It is rightfully described by many people as a real estate company. It is first and foremost in the business of being a landlord, charging its franchisees not only a monthly service fee of 4% of sales, but also rent for company-owned real estate. It just happens to help its tenants generate much-need revenue by facilitating the sale of cheeseburgers, fries, and milkshakes.
It’s an occasionally adversarial relationship. The company’s financial demands on franchisees can at times seem heavy-handed and unaffordable. Most of them typically acquiesce to the parent organization’s demands, however, because the headache is worth it. McDonald’s restaurants tend to dramatically produce more sales and earnings for operators than other fast-food restaurants do. That’s how the company has been able to raise its dividend payout every year for the past 45 years.
While this isn’t always the ideal move, reinvesting those dividends in more shares of the same company is a smart way to quickly build your stake in the income-producing investment.
Investors won’t have to make such a dividend decision with Nvidia (NASDAQ:NVDA), as the company barely pays one. But that’s not why you’d want to own this tech company anyway. Nvidia is a long-term buy because it’s perfectly positioned to capitalize on the current and future growth of data centers.
The company is best-known as a maker of computer graphics cards. It’s also the name behind some computer processing chips. As it turns out, however, the underlying tech used in its graphics …….