As a new investor, the stock market can be very daunting. With thousands of stocks available on the U.S. markets, where do you even begin?
The best way to get started is to invest in a company you believe in when you have the money to do so. Starting with a company that you know and love should make your investing experience much more enjoyable.
These 2 large-cap companies are well-known by most consumers and can provide a rock-solid foundation for any portfolio.
An investment in Amazon (NASDAQ: AMZN) is an investment in innovation.
Amazon has grown a lot since it was established in 1994. Iconic, founding CEO Jeff Bezos attributes this growth to constant experimentation and innovation.
Today, Amazon is so much more than just an online book store. Amazon now has three core business segments: video streaming and delivery through Amazon Prime, online retail through Amazon Marketplace and cloud solutions through Amazon Web Services.
This strategic innovation has definitely worked for Amazon. Product sales increased 8.5%, service sales increased 30.8% and Amazon Web Services net sales increased 41.9% in Q1 2019 compared to the same quarter last year.
Amazon is also taking advantage of the growth in smart-home technology, aiming to get into every room of the consumer’s home with their wide collection of smart-home devices, ranging from their virtual assistant Alexa to their Blink smart-camera system. One in every four adults in the U.S. now owns a smart speaker – with Amazon Alexa accounting for over 70% of the installed base.
Amazon’s acquisitions don’t just stop with Blink. In 2018, Amazon purchased the online pharmacy company, PillPack. Between 2008 and 2016, brand name oral prescription drugs rose 9% annually, with Americans spending roughly $1,200 every year on prescription drugs. By selling medication online, this new venture from Amazon attempts to take advantage of the growth within this industry and challenge the tried and test pharmacies such as CVS and Walgreens.
With a current market cap of $985 billion, the second-largest in the world, Amazon will not be going anywhere anytime soon and is a great place for a new investor to start.
2) The Walt Disney Company
Disney (NYSE: DIS) is a company that won the hearts of many through their animated films in the 1920s.
A quick glance at the top movies of the past few years reveals just how powerful Disney still is. In the past 10 years, Disney has been responsible for 8 of the highest-grossing films. This is down to Disney’s acquisition of some of the world’s most valuable intellectual property from LucasFilm, Pixar and Marvel — plus their excellent ability to market to consumers.
Disney’s revenue increased 3% in Q2 2019 compared to Q2 2018. While studio entertainment decreased 15% this quarter due to the unprecedented success of the ‘Black Panther’ in 2018, their ‘direct-to-consumer’ revenue increased 15%.
Going forward, this ‘direct-to-consumer’ segment will grow even further with Disney+ — an online film and television streaming platform — set to launch this November. This will give Disney the opportunity to take away a huge market share away from competitors like Netflix, who must now remove all Disney content from their site by the end of the year. Disney will gain a big edge over these competitors due to their classic, family-friendly intellectual property and their fair pricing at $6.99. Disney+ could have more than 130 million subscribers by 2024, according to some estimates.
Read about Netflix’s Hollywood play here: Algorithm and Blues: How Netflix is Conquering Hollywood.
Disney is much more than just a film and television company, however. Disney’s parks, experiences, and products segment makes up roughly 41% of their revenue and had grown by 5% in Q2 2019. In May 2019, for example, Disney opened the ‘Star Wars: Galaxy’s Edge’ park within their Anaheim-based Disneyland Resort. This new Millenium Falcon themed attraction has already had over 1 million riders, a rate of roughly 24,000 per day. With another Star Wars themed area coming to Florida in August, this diversification is not only good for revenue, but ensures that Disney will be around for years into the future.
In 2023, Disney will be 100 years old. Over the course of those 100 years, Disney has become one of the most culturally significant companies of all time. I firmly believe it will be around for hundreds more to come and is a great choice for any new investor.
MyWallSt operates a full disclosure policy. MyWallSt staff currently may hold long positions in Amazon and The Walt Disney Company. Read our full disclosure policy here.
Contributing Writer at MyWallSt
Ciaran is a contributing writer at MyWallst.