2 Robinhood shares to buy and hold for 10 years


Robinhood Markets was one of the pioneers of the commission-free investment model that is now so popular among online brokers. The company has allowed many people to start investing, including some who otherwise would never have dipped their toes in these waters.

At the same time, Robinhood has its share of detractors. Opponents argue that the company allows novice investors to engage in otherwise risky or advanced trading strategies, including cryptocurrency trading.

Even so, Robinhood’s investors can sometimes make great choices, as evidenced by a list of the 100 most popular stocks on its platform. Below are two of those stocks that I think are worth buying and holding for the long term.

This health giant is unstoppable

Johnson & johnson (JNJ 1.46% ) is one of the largest healthcare companies in the world by market capitalization, but this juggernaut is about to get smaller. In November, the company announced plans to split its consumer healthcare segment into a separate entity. The company’s consumer health business sells popular over-the-counter brands like Neutrogena, Listerine, Aveeno, and more.

Johnson & Johnson will retain its medical device and pharmaceutical segments. The company cited a desire to better focus its resources on these two operating divisions as one of the reasons for the planned separation, which is expected to be completed by the end of 2022.

Image source: Getty Images.

What should investors think of this decision? On the one hand, Johnson & Johnson’s overall business will become less diversified. On the other hand, the move will help improve the company’s top-line growth as its pharmaceutical and medical device businesses have performed better.

Let’s compare. In the third quarter, revenues for its pharmaceutical segment reached $ 13 billion, up 13.8% from a year ago. Meanwhile, its medical device revenue grew 8% year-on-year to $ 6.6 billion. In contrast, the company’s consumer healthcare segment revenue was $ 3.7 billion, 5.7% higher than the period a year earlier.

While spinoffs like this aren’t always successful, Johnson & Johnson will have a long way to go. The company has several successful products in its line. In the first nine months of the year, sales of the plaque psoriasis drug Tremfya jumped 48.5% year-on-year to $ 1.4 billion. In addition, revenues of Stelara, an immunosuppressant, increased 24.5% year-on-year to $ 6.8 billion, and the cancer drug Darzalex saw sales soar 49.1% to $ 4.4 billion. of dollars.

Johnson & Johnson is also benefiting from its COVID-19 vaccine, which grossed $ 766 million in the first nine months of this year. Booster shots of this vaccine are now allowed for all adults – and given the current trajectory of the pandemic (including the new omicron variant), it seems likely that this product will continue to contribute to Johnson’s revenue. & Johnson.

Finally, the pharmaceutical company has numerous pipeline programs and regularly adds new products to its line. J & J’s pharmaceutical segment alone is strong, and its overall business is even stronger thanks to its medical devices business. The company has been around for a long time and will continue to reward its shareholders despite the planned spin-off of its consumer health business.

Riding the wave of the fintech revolution

Fintech companies are actively seeking innovative ways to deliver traditional financial services to consumers. This industry is on an impressive upward trajectory, and one of the best companies to take advantage of this opportunity is Square (SQ -5.64% ), soon called To block.

Originally known for its sleek hardware components that help turn almost any mobile device into a point-of-sale system, Square now offers consumers various solutions through its peer-to-peer (P2P) payment app, Cash App. The app’s services include commission-free stock and cryptocurrency trading, prepaid debit cards, and direct deposits. One of Square’s long-term goals is to grow among under-banked populations.

So far, the Cash app is making significant progress. In the third quarter, its Gross Payment Volume (GPV) – that is, the total value of transactions made on the platform – stood at $ 3.7 billion, an increase of 27% from ‘year after year. The app’s GPV has grown at a compound annual rate of 134% over the past two years. And it posted gross profit of $ 512 million in the quarter, 33% more than a year ago and accounting for about 45% of the company’s total gross profit of $ 1.1 billion.

Point of sale system.

Image source: Getty Images.

There are still many opportunities for Square to seize. In August, the company announced that it would acquire After payment, an Australia-based leader in the growing trend of Buy Now and Pay Later (BNPL). BNPL allows consumers to purchase items on credit, often without having to worry about interest. The acquisition will cost Square $ 29 billion (paid for in shares) and will be completed in the first quarter of 2022.

Square plans to offer BNPL solutions within its vendor and its Cash App ecosystems. The goal is to attract more customers while providing another service to its already important customer base. The Cash app has some 70 million active customers and the company envisions an addressable market of over $ 160 billion, much of which is still severely under-penetrated.

Square won’t capture all of this space on its own; there are tons of competitors. But given the company’s already strong position, it’s worth betting on Square to perform well over the next decade.

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 motley! Challenging 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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