Every long-term investor should have some financial stocks in their portfolio. Why? Managing money is a multi-trillion-dollar industry.
There is something for every investor in finance. Want to invest in high-growth emerging markets? Check. Want some blue-chip stocks that will pay you dividends? No problem. No matter how you slice it, there is a path to building wealth that can help you retire a millionaire.
Here are five stocks to dig deeper into that I've picked for their strong fundamentals and long-term potential.
1. Nu Holdings
More than 660 million people live in Latin America, and many still lack access to essential banking services. Nu Holdings(NYSE: NU) is helping change that. It's a digital bank, which means it doesn't have physical branches. As long as you have internet access, you can bank with Nu. The company operates primarily in Brazil, Mexico, and Colombia, with 95 million members today.
Members are increasing, and the company's cross-selling of different banking, insurance, and investment products is fueling strong profit growth. The company's net income was $361 million in Q4, up from just $58 million a year prior. With profitable growth and expansion, Nu Holdings could add a spark to any long-term portfolio over the coming decades.
2. MercadoLibre
Many assume Latin American e-commerce giant MercadoLibre(NASDAQ: MELI) is a one-trick pony, but that couldn't be further from the truth. MercadoLibre's fintech unit, Mercado Pago, could be the company's crown jewel. In Q4, it had 53 million unique fintech users, up 22% year-over-year. Users can bank, borrow, and invest with Mercado Pago.
Investors may like that MercadoLibre is much more than a fintech company. Its e-commerce, logistics, and advertising units give the business a diverse revenue base. Total revenue grew 37% in 2023, so there's still a lot of potential investment upside if the company can maintain its torrid pace.
3. Berkshire Hathaway
Legendary investor and billionaire Warren Buffett can't invest your money for you, but buying stock in his holding company Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B) is the next closest thing. His company holds a variety of private and publicly traded businesses, spanning insurance, energy, railroads, and more. Collectively, Berkshire is a financial fortress. The company's many businesses provide stable and diverse revenue streams, and the company is sitting on a whopping $167 billion in cash.
That means investors can rest easy knowing the company is built to last. Its $370 billion investment portfolio is flush with blue-chip stocks that continue to grow and pay dividends that pile up on Berkshire Hathaway's balance sheet. It's not just safety investors get with this stock; the shares have also trounced the broader market over time. There's a lot to like here.
4. Bank of America
Mega-bank Bank of America(NYSE: BAC) is among the most significant holdings in Buffett's portfolio at Berkshire Hathaway. Buffett bought shares in 2007, then sold them, but bought them back in 2017. Banks like Bank of America are arguably too big to fail if the 2008-2009 financial crisis proved anything to investors. In other words, their failure would cause catastrophic damage to the financial system, and so the government provides them with a backstop.
Buffett has Bank of America as Berkshire's second-largest position today. The company grows with the U.S. economy and pays investors a solid dividend that yields 2.6% today. There's always the risk of another economic catastrophe, which threatens all banks. But ultimately, it's hard to deny Bank of America as a banking blue-chip investors can confidently buy and hold.
5. Public Storage
Real estate is one of the world's oldest wealth-builders. Real estate investment trusts (REITs) like Public Storage(NYSE: PSA) enable investors to benefit from real estate without owning buildings. REITs must pay at least 90% of their taxable income, making them great dividend stocks. Public Storage yields 4.3% at its current share price. The company owns more than 3,000 properties across the U.S.
What's excellent about Public Storage is that it can raise rent on units over time, which builds revenue growth into its business model. The industry is projected to grow by more than 7.5% annually through 2027, which bodes well for the company. Investors can buy and hold this blue chip, as real estate never goes out of style for long.
Should you invest $1,000 in Nu right now?
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America, Berkshire Hathaway, and MercadoLibre. The Motley Fool recommends Nu. The Motley Fool has a disclosure policy.
