When it comes to holding stock for the next 50 years, I’m looking for a company with a strong brand, a favorite that is an important part of consumers’ lives. The company may be fine today. Or, the company may have been in trouble recently after many years of success. In that case, you could be ready for a rebound after the current coronavirus health crisis subsides.
Here are three popular consumer companies, and they’re likely to be around and healthy in half a century from now.
Image Source: Disney.
Walt disney
Walt disney (NYSE: DIS) is having a bad time these days. Its parks, part of its largest revenue-generating business, were closed for months due to the coronavirus outbreak. Now, with the majority reopened, attendance is below normal levels due to social distancing measures. At the same time, Disney faces the costs of managing the parks and implementing new security measures, such as cleaning processes. And the media giant has postponed debuts on the big screen like the real action movie. Mulan as the health crisis continues in the United States
Despite this bleak short-term situation, the long-term image for Disney still has a lot of sparkle. The Magic Kingdom in Florida is the most visited theme park in the world, with Disneyland in California second. Some may prefer to postpone Disney travel amid the current pandemic. But once the crisis has subsided, consumers are likely to return to beloved activities that they were forced to suspend, such as visiting Disney.
Meanwhile, Disney’s new streaming service, Disney +, is gaining ground. The company said it had about 54.5 million subscribers as of May 4. This puts growth well ahead of schedule. Disney, which predicted Disney + profitability in 2024, initially set a goal for 60 million to 90 million subscribers by that time.
Disney shares fell 20% this year through Thursday’s close. It may not really gain momentum anytime soon. But an investment at current prices has the potential to pay in the long term.
McDonald’s
McDonald’s (NYSE: MCD) It is another brand that is strong enough to withstand the coronavirus storm. The fast food giant was again at number 1 in the Restaurant business and Technical report on the top 500 restaurant chains with the highest incomes last year. Although McDonald’s strength in the drive-thru helped offset recent distancing measures, the coronavirus outbreak still weighed on business. In the second quarter, comparable global sales fell 23.9%. That compares with a 6.5% increase in the prior year period. But the good news is that, as restaurants reopened, sales improved from month to month. Comparable sales fell 39% in April, but in June only decreased 12.3%.
While we don’t know the duration of the current health crisis, it is likely to be a temporary situation. So, let’s look at the pre-outbreak numbers as a guide to McDonald’s future prospects. Comparable sales in the two months ending February 29 increased 7.2% from the previous year. And in 2019, comparable global sales for the full year increased 5.9% for the biggest profit in over 10 years. McDonald’s is also a good buy for dividend seeking investors. The restaurant chain has increased its dividend each year in the 43 years it has been paying a dividend. Last year, the company reached its goal of paying $ 25 billion to shareholders in the three-year period ending in 2019.
McDonald’s shares have recovered more than 40% since their market crash, erasing losses for the year. Still, the stock is a bargain for the long-term investor.
Nike
Nike (NYSE: NKE) Shares have recovered 54% since the market crash, reducing this year’s decline to just 4.4%. Nike temporarily closed most of its stores in key areas such as China and the United States during the early stages of the coronavirus outbreak, and sales fell 38% in the fiscal fourth quarter. Still, online sales fueled investor optimism. The company reported a 75% increase in digital sales in the fourth quarter.
Digital sales growth may not continue at the same rate with most Nike stores now reopening. But digital sales gains are likely to remain significant. Here’s why: Nike has been increasing its digital platform since 2017. That’s when it launched an effort to sell directly to consumers through its website and stores seamlessly. That has already started to pay off. In the quarter before the health crisis, the company recorded a 38% increase in digital revenue.
Now backed by the recent boost in e-commerce, Nike is bolstering its initiative with a new plan called “Direct Consumer Acceleration.” Part of that includes connecting data, inventory, and membership to give consumers quick access to products.
The brand’s strength is also generating revenue at Nike. The company’s Jordan brand is a good example of Nike’s staying power. The Jordan brand recorded its $ 1 billion first quarter late last year, 17 years after basketball legend Michael Jordan retired.
It is too early to predict what will happen in 50 years. But so far, Nike has demonstrated its strength and ability to adapt to a changing market. Those qualities make this discretionary consumer stock a great long-term purchase.
