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3 shares to hold the next 20 years – The Motley Fool



Much can change in 20 years. Some dominant companies will fall into the ether, and companies that do not exist will take their place. There are very few companies with competitive benefits that are sustainable to all but guarantee continued success over the next two decades. According to three of our Motley Fool contributors, Waste Management (NYSE: WM) Berkshire Hathaway (NYSE: BRK-B) and Show : V) are members of the exclusive group. Here are the reasons why these shares belong to your portfolio for a long time.

Trust the business, trust the management

Tyler Crowe: Much can happen in 20 years, but one thing is for sure: We'll still waste things. As long as we create rubbish, Waste Management will still have a flourishing business. This is a heavily regulated industry that makes it impossible for new businesses to enter the freight, and waste collection and disposal is a low-margin business that differs from economies of scale. As the country's largest garbage carrier, it is able to keep someone from interfering with their peat for many years to come.

  A waste management truck.

Image Source: Waste Management.

In addition to having a business that appears to be extremely durable, Waste Management also has a management team that you can count on making good decisions and generating returns for investors. Although it is a relatively slow growth industry, management has been able to squeeze out profits by being hyperfocused on costs and by increasing earnings per share with a large share of buybacks of shares. As a consequence, this apparently boring business is seeing a strong return on equity on a regular basis.

  WM Return on Equity (TTM) Chart

WM Return on Equity (TTM) data by YCharts

The combination of an incredibly hard-working business in an unpopular but necessary industry and a management team that has a reputation for being Good fund managers are what I want in my decades of investment. That is why I own stocks of waste management and are completely comfortable to own them for the next 20 years or more.

The Gold Standard for Buy-and-Hold Shares

Tim Green (Berkshire Hathaway): Warren Buffett has built Berkshire Hathaway into a $ 500 billion behemoth over the past half century. The conglomerate consists of a varied set of wholly owned companies, including insurance, a large railroad and dozens of other companies, as well as a massive portfolio of stocks.

Although Berkshire is valued at over half a trillion dollar, Buffett thinks it's cheap. The company bought back about $ 1 billion of its own shares in August, and several buybacks may come as Berkshire's money stack grows and the lack of reasonable procurement targets continues. Buffett is aversion for overpaying for companies, one reason why Berkshire has flourished in the past 50 years. "Be afraid when others are greedy and greedy when others are dreadful" is a Buffett mantra who has served the company well.

Buffett will not be responsible forever – the iconic investor is now 88 years old. But as long as his followers adhere to the conservative, value-based approach to which Buffett is known, Berkshire can continue to thrive for decades to come.

This trademark may be higher in the coming decades

Sean Williams (Visa): There are not so many shares that have seen-and-forget it appeals to two full decades, but Payment Processor Visa is one of these rarities. [19659012] In the US, Visa has an almost insurmountable payment processing market share. From 2006 to 2016, Visas's US market share after net sales volume increased from 42.5% to 50.6%. Meanwhile, the next closest competitor, American Express (NYSE: AXP) was almost 28 percentage points behind, from 2016. Having such a great leadership in the world's most important market makes Visa a go-to partner for sellers, and it should lead to steady long-term growth.

Visa also offers a lot of potential outside the United States. In June 2016, it acquired Visa Europe, which significantly increased the company's commercial requirements and worldwide short circulation range. Equally important, it gave access to a handful of growing European countries.

In terms of purely market potential, still around 85% of global transactions are carried out in cash. This should allow Visa to significantly expand its presence in Africa, the Middle East and Southeast Asia for the next couple of decades. These emerging markets provide significantly higher growth levels and help Visa to be almost recession-proof.

As the icing on the cake, Visa has delivered a steady rise in dividends that has been consistent with its growing business. Although it only gives 0.7%, I would not be too worried. Visa is keen to reinvest in the infrastructure that will drive its foreign and domestic growth, but it still has plenty of money to pass along a modestly improved payout every year since 2009.

Long story short: Put Show and forget. [19659026] Sean Williams has no position in any of the above-mentioned shares. Timothy Green owns shares in Berkshire Hathaway (B-shares). Tyler Crowe owns shares in Berkshire Hathaway (B-shares), Visa and Waste Management. The Motley Fool owns shares of Visa. The Motley Fool recommends Berkshire Hathaway (B-shares). Motley Fool has a disclosure policy.


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