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It can be difficult to understand how stocks can compound your wealth over years and decades. The secret to getting rich is nothing short of amazing – it simply involves buying and owning large stocks for long periods of time. All you need is patience to stay the course as stock prices can go through significant volatility in a short period of time.
That is, if the selection process is done correctly, all you need to do is sit firmly on your winners. Great companies grow their revenue, profits, and cash flow over time, offsetting stock price increases and helping you stay rich come retirement.
Attributes to look for include a strong and growing brand, trends that will sustain long-term growth, and a long runway for growth to materialize. Technology companies qualify as great combinations because many of them have core brands and are well-positioned to grow with digital adoption and technological advances.
Here are three tech stocks that have everything you need to grow your pot of gold for retirement.
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Apple
Apple (A.P.L 0.39%) It must be considered one of the most innovative technology companies in the world. The iPhone maker has proven time and time again that its brand alone is enough to endear a loyal following to many products, devices and services. Although down 18%, the tech behemoth is down just 5% year to date. NASDAQ Composite Index in the same period, proof of durability and resilience.
Financially, the company has continued to grow revenue and net income over the past three years despite the onset of the Covid-19 pandemic. Net sales reached $260.2 billion in fiscal 2019 (ended September 28) and grew to $365.8 billion in fiscal 2021. Net income grew by 71.3 percent to $94.7 billion over the same period. The tech giant continues to raise its quarterly dividend after passing a 4-for-1 stock dividend in 2020.
Apple recently reported a strong fiscal 2022 third quarter, with revenue at a record $83 billion, up 2 percent year-over-year. The active installed base of devices also reached new all-time highs for all major product categories, with record numbers of people ditching other brands to switch to the ubiquitous iPhone.
The company He expects strong iPhone sales in 2023 despite an economic slowdown, and has ordered suppliers to stockpile 90 million units for the next iPhone, the iPhone 14. Elsewhere, the company’s innovation can be seen again for the next version of the version. A smart watch that has an accurate temperature sensor built into it. Investors can maintain confidence that Apple’s strong brand power and continued innovation will help it steadily grow its loyal customer base.
PayPal
Payment company PayPal (PYPL -1.90%) It has been an important conduit connecting merchants and their customers for many years. The platform and digital wallet enable customers to conduct a variety of secure online transactions that have seen the company’s Total Payment Volume (TPV) consistently grow. Over the years, PayPal has expanded its payment options, most recently allowing customers in the UK to make transactions using cryptocurrencies such as cryptocurrencies. Bitcoin And Ethereum.
The company’s financial and operational metrics also impressed. Net income rose to $25.4 billion in 2021 from $17.8 billion in 2019, with net income jumping nearly 70 percent to $4.2 billion over the same period. For the first half of 2022, net income grew by 8.3 percent year-over-year, as it maintained growth.
PayPal is also committed to improving its operating margins by authorizing a new $15 billion share buyback plan by 2023. Total active accounts rose from 305 million in 2019 to 426 million in 2021, TPV grew from $712 billion to $1.25 trillion in two years.
As the pandemic has accelerated digital adoption and e-commerce usage, there are signs that PayPal may be able to keep up the momentum. The payments company is leveraging this trend to continue growing its user base and TPV. Over time, the increase in the number of users on the platform should raise the revenue and net income.
Free market
Free market (Melly -4.34%) It is the largest e-commerce player in Latin America. It not only provides a platform for buyers and sellers in the region to trade products, but also hosts a payment platform and provides a comprehensive fintech solution to the logistics fulfillment network.
The company’s financial growth has been impressive, with net income more than tripling from $2.3 billion in 2019 to $7.1 billion in 2021. Mercado Libre has gone from a loss of $172 million in 2019 to a net profit of $83.3 million. Adding operational parameters along the way.
Gross merchandise volume (GMV), a measure of transaction flow on the company’s platform, doubled from $14 billion in 2019 to $28.3 billion in 2021, while TPV rose from $28.4 billion to $77.4 billion over the same period. Total shipments and payment transactions have similarly ballooned, making Mercado Libre one of the leading e-commerce players in the region.
The momentum continued into 2022, with second-quarter GMV peaking at more than $8.5 billion, up 22% year over year. The company’s growth shows no sign of slowing down as it rolls out improvements to its platform, such as faster and free shipping for three-quarters of GMV and a better survey tool to encourage usage. Its fintech solutions division is launching more financial services and increasing its access to credit to attract more consumers and merchants.
With a major market position in South America and a tradition of continuous improvement, MercadoLibre looks set to continue its neck-and-neck growth in the coming years.
Royston Young has positions at Apple and PayPal Holdings. He has a position in the Motley Fool and recommends Apple, Mercado Libre and PayPal Holdings. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 calls on $130 on Apple. The Motley Fool has a disclosure policy.
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