Many investors are looking to get rich quick, but the experts among us realize that this is unlikely to happen. Worse yet, many common get-rich-quick attempts (buying penny stocks, for example, or investing using a lot of margin) tend to end up making people poorer, not richer.
The most reliable way to build wealth through stocks is to do it over decades. The most impressive performing stocks in the market have often rewarded their shareholders more in the long run. Even investing just $5,000 can pay off pretty well. If you averaged, say, 15% annual growth over 20 years, it would grow to over $80,000. An average growth rate of 20%, which is difficult to achieve, would take you to more than $191,000. (Of course, investing that $5,000 regularly, or larger sums regularly, can produce more dramatic results.)
Here, then, are three companies that appear poised to do very well over the long term. See if any or all interest you.
Let’s start with the discount warehouse titan, Costco (NASDAQ: COST). You might think that it is not such an interesting action as, for example, amazon.com or Apple, but its performance is not bad at all. Over the past decade, his stock has averaged a 20.4% annual return, enough to turn a $10,000 investment into $64,045, and that’s without reinvesting dividends.
Still, the future matters much more than the past when it comes to investing, and Costco’s future looks bright. It is designed to continue to generate profits in large part by treating its employees, customers and shareholders well. It pays above-average wages with above-average benefits, limits its margins on products to around 14%, and pays a dividend that, while not huge at 0.6%, has been growing at an average annual rate of 12%. Its Kirkland brand is highly respected and known for its quality, and its annual membership fees of between $60 and $120 generate close to $4 billion in revenue.
docusign (NASDAQ: DOCU) It’s not as familiar as Costco, but there’s a good chance you’ve had to sign some document remotely, on your computer. If so, you may have used the DocuSign service. It is commonly used for real estate transactions, purchase orders, sales contracts, confidentiality agreements, and even student permission forms. The company has more than a million paying customers and more than a billion users worldwide.
DocuSign’s stock has soared since its debut in 2018, with an average annual return of 24.5%. The company is also well positioned to continue growing, capturing more clients both internationally and domestically and expanding its offerings. One promising technology it offers is an AI-based “Analyzer,” which can help clients by summarizing key points in contracts. It has also been associated with Zoom Video Communications to enable face-to-face transfers.
DocuSign’s recently reported earnings for fiscal year 2022 featured a 45% year-over-year revenue increase and a 71% net loss below prior year levels. That reflects solid growth, but investors have concerned about slowing growth because the pandemic is ending. Therefore, DocuSign shares recently fell 70% from their 52-week high, making it a good time for long-term investors. take a closer look in the company.
3. Axon Company
then there is axon Business (NASDAQ: AXON), perhaps the least familiar of these three, although you may have known it by its old name, Taser International. the growth stocks specializes in weapons and law enforcement technology. It still makes and sells tasers, and is expanding its target market by starting to sell not only to those who carry guns in their line of work, but also to consumers. for self defense.
Axon is more than that, though: It also sells police body cameras, dash cams, and services that can store and analyze captured video footage.
Axon is in full swing, reporting annual bookings up 54% year-over-year in 2021, topping $1.7 billion, while annual recurring revenue is up 48%. Its shares are down from their 52-week high, but it doesn’t look like a screaming bargain at recent levels. Its market value recently hovered around $9.5 billion. If you can see it becoming much more valuable in the future, consider adding it to your watch list or buying it incrementally as it has the potential to make you rich for decades to come.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. selena maranjian owns Amazon, Apple, Axon Enterprise, Costco Wholesale, and DocuSign. The Motley Fool owns and recommends Amazon, Apple, Axon Enterprise, Costco Wholesale, DocuSign, and Zoom Video Communications. The Motley Fool recommends the following options: $120 long calls in March 2023 at Apple and $130 short calls in March 2023 at Apple. The Motley Fool has a disclosure policy.