New investor? These stocks could grow your portfolio

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Stock selection can be overwhelming, especially if you are a new investor. But here is the most important piece of advice I can offer you: Approach investing with a long-term mindset. Specifically, buy stocks that you feel comfortable owning for at least three to five years.

If you don’t know where to start, try looking for companies with an edge. In other words, before buying a stock, ask yourself, “What does this company have that its competition is lacking?” Companies with a competitive advantage are often excellent long-term investments.

For example, Adobe (NASDAQ: ADBE) and Walt disney (NYSE: DIS) fit this bill, and both stocks have been big winners over the past decade, increasing by approximately 1,970% and 360% respectively. Here’s what you need to know.

Image source: Getty Images

1. Adobe

Adobe has become one of the world’s premier software brands. Its cloud-based tools play an important role in helping customers design creative content and deliver personalized customer experiences.

Adobe Creative Cloud is the company’s flagship software suite. It includes products like Photoshop for image editing, InDesign for layout, and Illustrator for graphic design, all of which are cutting edge solutions. And as digital media evolves, so has Adobe – its portfolio also includes tools for 3D design and augmented reality.

Adobe Experience Cloud is a more recent addition to the company’s portfolio. This platform combines elements such as analytics and marketing, enabling customers to collect data, manage content, and engage consumers across digital channels including web, mobile, and video. To boost this business, the company acquired Workfront in December 2020. This specialist in workflow management is expected to help Adobe customers work more efficiently, thereby adding value to the Experience Cloud platform.

In particular, the complementarity of the various Adobe products is a key selling point. Rather than assembling multiple solutions from different vendors, customers can use its software to seamlessly cover all of their content creation needs. This gives the company an edge over its competition.

Financially, the company is a machine. After nearly 40 years in business, it continues to post solid financial results like clockwork. Few companies can do the same.

Metric

Q2 2017 (TTM)

Q2 2021 (TTM)

TCCA

Returned

$ 6.5 billion

$ 14.4 billion

22%

Free movement of capital

$ 2.4 billion

$ 6.6 billion

29%

Source: Ycharts. TTM = 12 rolling months. CAGR = compound annual growth rate.

Management estimates its total addressable market could reach $ 147 billion by 2023, leaving plenty of room for the business to grow. Most importantly, Adobe has built a valuable brand and established itself as an industry leader. These advantages should help the company capitalize on its huge market opportunity. This is why this growth stock looks like a smart investment for new investors.

2. Walt Disney

According to Fortune, Walt Disney is the fourth most admired company in the world, and it’s easy to see why. Its content portfolio is packed with fan favorites, including action-packed titles from Marvel and Star wars, Pixar family films and a host of animated and live-action classics like Frozen and The Lion King.

In fact, Disney films made up nearly 40% of U.S. box office revenue in 2019, and the company produced 7 of the 10 highest grossing movie titles of all time. No rival can make the same claim – that’s what makes the Magic Kingdom so magical.

Falcon holding Captain America's shield.

Image source: Disney.

Looking to the future, the bull’s case for Disney is simple: As streaming continues to take a part in linear television, its premium content and extensive sports programming rights are expected to drive the growth of its direct selling services to the UK. consumer (DTC): Disney +, ESPN + and Hulu. Likewise, as theaters and theme parks continue to reopen, pent-up consumer demand is expected to translate into strong ticket sales.

It is still early days, but these trends are already marking the results of the company. Since launching in 2019, Disney + has added more than 103 million subscribers, making it the second largest streaming service in the world. Additionally, Disney’s DTC sales jumped 65% in the first half of fiscal 2021 to $ 7.5 billion.

Walt Disney World and Disneyland are both open again, and in the last earnings call, CFO Christine McCarthy noted strong national bookings for park bookings. by marvel Black Widow debuted in theaters not too long ago, amassing $ 215 million in its first weekend, including $ 80 million in domestic box office revenue. This makes it the biggest national opening since the start of the pandemic.

Ultimately, investors shouldn’t expect Disney stocks to double or triple in the near term, although I believe those returns are possible over time. Either way, Disney’s award-winning content and popular attractions create an ecosystem that no rival can match. And in my opinion, this rock-solid competitive advantage makes Disney a solid long-term investment.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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