There’s seemingly never going to be a time when these three companies don’t dominate their particular industries.
It’s usually not difficult to find a stock you like well enough to buy when you know you can sell it if things turn ugly. Finding a name with long-term growth potential that you can buy with plans to leave it to your children or grandchildren, however, is a different story. It requires longevity … near-certain, indefinite longevity. Not every company is truly built to last — and thrive — for decades on end.
A few of them are, however.
Here’s a closer look at three names that can and likely will create lasting generational wealth, because they’re already the established leaders of industries the world should always support.
Image source: Getty Images.
Amazon
It’s such a frequently suggested stock pick that it’s almost become a cliché. Nevertheless, e-commerce giant Amazon (AMZN 2.61%) is a fantastic multigenerational holding for a couple of reasons.
One is its sheer dominance of a business that’s never going away: Online shopping. As of its most recent look, Digital Commerce 360 reports that Amazon’s share of the United States’ e-commerce market is right around a market-leading 40%. The next-nearest competitor is Walmart (WMT 0.80%), but it’s a distant second with a share of a little less than 11%.
Amazon isn’t doing quite as well overseas, where it faces off with the likes of Alibaba and MercadoLibre. Still, the company’s doing well on this front. Its international retail sales were up almost 12% through the first three quarters of last year, pumping up this arm’s operating income by 50%. Amazon’s overseas operations appear to have “turned the corner” once and for all, profit-wise.
Today’s Change
(-2.61%) $-6.24
Current Price
$232.88
Key Data Points
Market Cap
$2.6T
Day’s Range
$231.56 – $234.40
52wk Range
$161.38 – $258.60
Volume
426K
Avg Vol
45M
Gross Margin
50.05%
The other reason Amazon is a name you can comfortably count on for passing down to your heirs is that it’s not just the leading player within the e-commerce arena. It’s a company that was built from the ground up to be capable of doing almost anything, and doing it well.
Case in point: Cloud computing. Amazon Web Services (AWS) didn’t exist until 2006, after Amazon.com became a well-established e-commerce platform. It’s since become the world’s cloud leader, accounting for 29% of the global industry’s sales (according to Synergy Research Group).
Although AWS is by far the company’s biggest success outside of e-commerce — generating on the order of 60% of companywide operating income — other successful initiatives that have added to Amazon’s top and/or bottom lines include Amazon Prime, advertising at Amazon.com (which has produced almost $65 billion worth of high-margin revenue over the course of the past four reported quarters), and the creation of Alexa and Echo devices. Even if the company knows some of its experiments will fail, enough of them will succeed for the risk to pay off in perpetuity.
Walmart
While Amazon’s dominance of the Western hemisphere’s online shopping industry is built to last, so too is Walmart’s dominance of brick-and-mortar retailing.
Although numbers from Capital One suggest that Walmart only accounts for 6.3% of the U.S.’s total retail spending, that’s actually huge for this business. The next-nearest name like it is Costco, but it only does about one-third the domestic business that Walmart does. In fact, based on nothing more than retail sales to consumers alone — offline or online — Walmart is still technically the U.S.’s single biggest retailer.
Today’s Change
(-0.80%) $-0.96
Current Price
$118.74
Key Data Points
Market Cap
$954B
Day’s Range
$118.63 – $121.62
52wk Range
$79.81 – $121.62
Volume
645K
Avg Vol
26M
Gross Margin
23.90%
Dividend Yield
0.79%
Credit its physical footprint, mostly. The company reports that 90% of the U.S. population lives within 10 miles of one of its 4,606 U.S. stores, where it does nearly 70% of its business, and where nearly 84% of retail spending is still done in-store rather than online.
Walmart isn’t simply counting on its sheer size to remain the dominant name in the business and continue growing as it has in the past. Like Amazon, it’s now regularly evolving its offerings to deepen its relationships with its customers. Walmart now offers a subscription-based delivery service for online orders that’s akin to Amazon Prime. In 2024, the brick-and-mortar retailing giant also acquired smart-television brand Vizio, mostly to bolster its own advertising business and gain access to Vizio’s 19 million active smart TV users.
You’ll likely never see the sort of growth pace from Walmart that you can expect to see from Amazon. You likely will see steady, reliable growth from this retailer, in perpetuity. There’s just no brick-and-mortar rival in a position to put any real pressure on its dominance of this space.
Netflix
Finally, add streaming powerhouse Netflix (NFLX +0.92%) to your list of stocks that could create lasting generational wealth.
There’s drama working against this stock right now. The company’s preparing to shell out roughly $80 billion to acquire Warner Bros. Discovery‘s (WBD 0.49%) streaming assets, film and TV studio, and intellectual property like DC’s super heroes … a relative fortune given these assets’ current revenue and profits.
Today’s Change
(0.92%) $0.81
Current Price
$88.81
Key Data Points
Market Cap
$402B
Day’s Range
$88.52 – $89.90
52wk Range
$82.11 – $134.12
Volume
824K
Avg Vol
45M
Gross Margin
48.02%
This seemingly steep price may prove well worth it for Netflix in the long run. With this pairing, not only will Netflix’s leadership of the U.S. streaming space be cemented in place, but it’ll make a big dent in the fragmented international streaming market as well.
At the same time, Warner Bros’ studios not only provide another option for self-produced content, but Warner Bros’ distribution arm could conceivably distribute Netflix-made programming outside of the streaming outfit’s own delivery ecosystem. If and when it happens, the combined companies will have co-control of two interlinked aspects of the entertainment industry that not even the venerable Walt Disney has been willing or able to do all that much with.
That’s when the fireworks could really start.
Why? While people are still giving up conventional cable in exchange for more streaming services, no single name in the streaming business has pulled away from the pack with a decisive lead. This has kept profits in check by limiting scale and keeping spending to a relative minimum.
Eventually, though — like in nearly every other industry — the streaming business will become a proverbial two-horse race with one clear leader. That leader will almost certainly be Netflix, while the other key competitor is likely to be a combination of several streaming service providers that realize they must join forces to have any chance of keeping up.
Even then, however, it’s the industry leader’s stock that tends to dish out the best prolonged performance in the business. That’s how it happened for Walmart and Amazon, anyway.
