Let’s face it: many of the stock picks investors describe as “forever” holdings end up not being permanent positions when things take a turn for the worse. Fear leads to defensiveness, which leads to early exits.
And truth be told, often that’s the right move. True permanent holdings are few and far between.
There’s one actual “forever” prospect, however, that would likely be at home in almost anyone’s portfolio. That’s Alphabet (GOOG 0.17%)(GOOGL 0.11%). Here’s why.
Today’s Alphabet is a lot different from yesteryear’s
The company doesn’t need much of an introduction. Alphabet is, of course, parent to search engine giant Google, which handles 90% of the world’s web searches (according to numbers from Statcounter) and accounts for more than half of the company’s revenue and most of its earnings.
Today’s Change
(-0.11%) $-0.38
Current Price
$349.40
Key Data Points
Market Cap
$4.2T
Day’s Range
$344.24 – $355.77
52wk Range
$147.84 – $355.79
Volume
1.2M
Avg Vol
32M
Gross Margin
59.68%
Dividend Yield
0.24%
That’s not all Alphabet is, of course. Streaming platform YouTube is a part of the organization, while Google Cloud has quickly grown. Alphabet also owns the popular mobile operating system Android.
This is an impressive degree of diversification, made even more impressive by the fact that these businesses position Alphabet as a leader in several of the global economy’s highest-growth markets. And it’s proving it. Last year’s revenue was up 15% year over year, extending a long-established streak of top-line growth.
That’s not quite what makes this name one you can feel good about buying and holding forever, however. It helps, but what makes Alphabet a great “forever” prospect is the fact that it’s proven itself willing and able to establish new lines of business or pick those it can dramatically improve.
Image source: Getty Images.
Consider that YouTube and Android weren’t part of this company in its infancy. Now, not only are they both solid profit centers in their own right, but they also funnel people into Google’s broader ecosystem. Alphabet wasn’t in the cloud computing business until 2008, but now it’s the company’s fastest-growing venture, chipping away at industry leader Amazon. And while it’s still far too early to see how the effort might pay off, Alphabet’s robotaxi initiative, Waymo, is promising, putting the company in a market that Precedence Research expects to grow by an average annual rate of more than 52% through 2034, when it could be worth nearly $190 billion per year.
Its foray into artificial intelligence, of course, is a biggie as well.
Built to be constantly rebuilt
Alphabet isn’t a great long-term investment just because it’s great at what it does. The crux of the bullish argument here is that Alphabet can evolve and adapt as opportunities surface. It arguably does so better than most, in fact, as this innovation-and-experimentation mindset is woven into its corporate ethos.
Perhaps the most exciting aspect of owning Alphabet for the long haul is seeing what new product it comes up with next to expand its reach and grow its top and bottom lines.
