One of the best ways to secure your financial future is to invest, and the best way to invest is over the long term. The optimal way to secure your long-term investment is, to invest in large-cap stock.
Large-cap stocks are valued at more than $10 billion. Also called big-cap stocks, large-cap stocks are considered the stalwarts or blue chips of the stock market. These are the companies that hold a dominating position in their sector. Think of companies such as Walt Disney, Coca-Cola, and General Motors, they have established giants with dominant positions in their industries.
The famous coffee brand, Starbucks (SBUX) has historically outperformed the broader market since its IPO in 1992. The company looks to continue gaining market share as it recovers from the pandemic. Starbucks is a good example of a large-cap stock that offers growth potential with opportunities.
The company has considerable competitive advantages, including its well-known brand, popular rewards programs, and tech initiatives. Starbucks’ focus on service, convenience, and technology to drive customer loyalty is evident in its rewards program. Last year, membership in its U.S. rewards program increased 28% to about 25 million, as of October.
This formula has added up to higher sales. In its latest fiscal year ended Oct. 3, same-store sales soared over 20%. Part of this increase stems from restaurant closings in the year-earlier period due to COVID-19 restrictions. In 2020, same-store sales fell by 14% because of the closings, but in the prior year, they rose by 5%. Historically, the company has produced higher same-store sales.
Starbucks also continues to expand its number of restaurants. During the latest fiscal year, the company opened up 1,173 licensed and company-owned stores, for a total of 33,833 worldwide. The U.S. and certain international locations such as China remains a growth area.
Considering growth potential and strong financials, SUBX stock is a great large-cap stock to invest in for the long term.
MercadoLibre (MELI) operates online commerce platforms in Latin America. Latin America’s largest e-commerce business, is a great example of a large-cap company that is still growing quickly. Think of MELI as a combination of eBay. The company features listings from third-party merchants and Amazon because it is building a shipping network.
But it’s Amazon and eBay come with a twist, which is the company’s payment tool, Mercado Paago.
Mercado Paago is similar to PayPal, and it is made for MercadoLibre shoppers. This platform has grown to become something of a multinational bank in Latin America. The network is used to make payments at places such as grocery stores and gas stations. Mercado Libre is a major investor in the crypto space and that’s what makes it an interesting large cap stock.
At the same time, it increases the risk and volatility of the stock. But being a large cap, M E L I will give you profits owning it in the long run. Recently, the company acquired shares in the 2 TM Group, the parent company of Mercado bitcoin.com. That will diversify Mercado Libre’s strength in its blockchain-based portfolio. Moreover, MELI is also a strategic investor in New York-based Paxos, a blockchain company that it had worked with, to offer crypto investments to some clients.
Mercado Libre is a profitable company, and MELI stock looks like a good investment option going into the long term.
Walmart Inc. (WMT)
Walmart (WMT) is the world’s biggest retailer, as well as the world’s largest company by revenue. It has many competitive advantages, including economies of scale that work in its favor, a reputation for low prices, and stores within 10 miles of 90% of the Americans.
Walmart has been paying its shareholders consistent dividends which adds extra value to the stock. But what makes the company more than just a long-time Dividend Aristocrat is the fact that Walmart is becoming more than just a retailer.
WMT is leveraging its physical footprint to enter industries such as healthcare by adding health clinics. Walmart also launched a new fintech start-up in early 2021 and poached two Goldman Sachs executives to lead it. The U.S. retail giant has built a formidable e-commerce business that ranks second in the country behind Amazon. That adds a valuable stake in a rapidly growing market. With the company clearly evolving, Walmart could be a much different organization in the next 5 to 10 years.
Being profitable and with solid prospects, WMT stock will be full of potential heading into the long term in large-cap stock category.
JD.com (JD) is a Chinese e-commerce company and retail infrastructure service, provider. In China, there is a huge market and for a company like JD, there is a lot to explore.
As per GlobalData and Statista, China is home to the world’s largest e-commerce market, estimated to be worth $3.3 trillion by 2025. That’s more than five times larger than the U.S. e-commerce market. With a population of 1.4 billion, China has emerged to be the new economic power.
China has often remained inaccessible to independent businesses and upstart entrepreneurs abroad. To overcome the broader issues, JD has recently collaborated with Canadian internet retail giant Shopify to expand its cross-border operations.
The partnership will help U.S. brands that use Shopify to get started in China in no time with JD offering end-to-end fulfillment. It also offers price conversion to local currency, translation services, and much more.
The potential of Chinese consumers has been plain for years. Whereas, JD has a good chunk of that market with 550 million active customers. Chinese consumers have been rapidly evolving, embracing e-commerce big time and fueling the rush in luxury goods in recent years. The market is still wide open and JD is in a great position to gain more market share. JD’s collaboration with Shopify will help in achieving its desired goals and connect more consumers to its ecosystem.
JD stock looks like a solid large-cap stock to invest in the long term.
Mastercard Incorporated (MA)
Mastercard (MA) is an American financial services company that also deals in digital payments across the globe. The investors may take Mastercard as an outdated payment system as things are heading towards the newer fintech companies using blockchain. However, some of the newer technologies have meaningful limitations which could benefit existing payment networks.
Mastercard is regularly monitoring the competition and technological disruption. As now of, MA does not see a significant risk in the foreseeable future to the company. Rather, it holds the potential to grow considering the rise in payments of merchants across the globe.
To speed things up in the payment world, Mastercard has recently launched its Mastercard Track™ Instant Pay. It’s a next-generation virtual card solution that uses machine learning and straight-through processing to enable instant payment of supplier invoices. The new, first-of-its-kind virtual card solution delivers greater choice, efficiency, and automation for buyers and suppliers. That’ll also help the merchants to streamline and speed up business payments.
MA has been delivering strong financials over the past few quarters. The company is profitable with a strong balance sheet. Mastercard is working on different ways to fulfill the modern requirements in the payment world.
Considering its portability and current growth, MA stock seems a good investment in the large-cap stock category for the next five years.