3 Stocks That Could Be Easy Wealth Builders
If you’ve been an investor for a while, you’ve likely heard Warren Buffett’s advice: “You can’t buy what is popular and do well.” And his point is well taken. Plenty of stocks are overvalued simply because everyone seems willing to pay a premium price to own them.
Don’t be so committed to a general tip, however, that you look right past a solid wealth-building prospect staring you right in the face. Sometimes, the highest-odds wealth builders are its most obvious stocks.
With that in mind, here’s a closer look at three no-brainer ideas that may not create fireworks but are surefire market leaders with the potential to make good forward progress for a long, long time.
1. Walmart
You know the company. Walmart (WMT) is, of course, the world’s biggest brick-and-mortar retailer, operating nearly 11,000 locales worldwide, with more than 5,000 of these stores in the United States alone (when counting its Sam’s Club warehouses). Indeed, 90% of U.S. residents live within 10 miles of a Walmart store. It also operates the country’s second-biggest e-commerce platform, behind Amazon.
The retailer hasn’t always used its powerful name and reach all that well. It arguably got complacent with its growth between the 1980s through the early 2000s, not recognizing the threat that Amazon was becoming while at the same time just failing to remain competitive. You may recall horror stories from a decade ago about Walmart’s habitually empty store shelves, for instance.
Putting CEO Doug McMillon in charge back in 2014, however, jump-started a long-needed evolution. Not only did the company finally start taking e-commerce seriously shortly thereafter, but McMillon started what could be considered a cultural revolution for the retailer. That’s when Walmart became more than just a place to buy a range of consumer staples at a good price. It became a lifestyle company, offering once-unlikely goods like private-label premium wine and plant-based ice cream. It’s operating a handful of veterinarian clinics, too, and offers technology installation services akin to Best Buy‘s Geek Squad. In-store shoppers will also notice store displays that look like something you’d expect to see at a traditional department store such as Macy’s or JCPenney. It even manages a subscription-based delivery service that’s competitive with Amazon Prime.
And all of these initiatives have mattered. Although boosted by a combination of inflation and the sheer difficulty of going through the COVID-19 pandemic, most of Walmart’s market share growth since 2022 has come from residents of households earning more than $100,000 per year. Yet, the backdrop hasn’t necessarily prevented Walmart’s other customers from continuing to shop with the retailer. Conversely, rival Target — once a frequent destination for these six-figure consumers — has seen its sales stagnate since 2023.
More important to interested investors, this new pragmatic consumer norm paired with Walmart’s willingness to evolve is likely here to stay for at least one full generation of shoppers. Maybe more.
2. Apple
It’s another name that doesn’t need much in the way of an introduction or explanation. Not only is Apple (AAPL) considered the world’s most valuable brand name, but it’s also the world’s biggest company as measured by market cap. That’s what happens when you make the world’s most popular smartphone — the iPhone.
Apple is more than just the iPhone, of course, which only accounts for about half of its current revenue. Indeed, being the name behind the world’s most beloved smartphone hasn’t helped much for a while now. iPhone sales — revenue as well as units — haven’t really grown since 2021.
There’s a reason, however, that Apple shares have continued to climb since coming out of 2022’s bear market. That is, this is Apple! It’s the world’s biggest and best-loved company for a reason. Any iPhone slowdown is apt to only be a temporary headwind while it’s working on its next revolutionary growth engines.
Artificial intelligence is one of these engines. Although interest in its Apple Intelligence platform, which launched in October, has been modest, that’s not an indictment of the quality of the tool. This is an indication that consumers just need a bit more time and education before they fully embrace the power of personalized AI, while Apple itself needs to further refine its solution.
It’s still coming, though. Analysts at Jeffries don’t see Apple’s AI efforts measurably paying off until 2026 or 2027, but once it starts, Wedbush’s Dan Ives believes we’ll see “a multiyear upgrade cycle that will result in a supercycle and ultimately drive iPhone growth toward the high single digits.”
This article was originally published on this site