Over the next decade, some industries, such as fintech and streaming, are likely to grow significantly. That’s what many analysts predict due to several factors, such as rising demand for digital payment and banking services, and the decline of more traditional entertainment like cable in favor of streaming. Companies that are leaders in these markets may deliver above-average returns through 2036.
Let’s consider two stocks, one in each industry, worth investing in today and holding on to for the next decade: Robinhood Markets (NASDAQ: HOOD) and Roku (NASDAQ: ROKU).
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Robinhood’s shares have more than doubled over the past year as sales and earnings have been growing at a good clip. In the third quarter, the company’s revenue doubled to $1.27 billion, while net income rose 271% year over year to $556 million. The company is moving in the right direction in other areas. Robinhood’s number of investment accounts is improving constantly, for instance.
But could it keep up that momentum over the next 10 years? There will be some volatility for sure. Robinhood is trading at 38.7 times forward earnings, which suggests little room for error. However, its brand power and expanding service portfolio could help it perform well through 2036.
Robinhood helped pioneer the commission-free trading model, making investing in stocks easy. The company’s entirely online model also means it can save on overhead costs and pass those savings on to customers in various ways. Robinhood is particularly popular with younger investors for a reason, and over the long run, it should attract a fair number of young adults just getting into investing.
Then there is Robinhood’s growing portfolio of services. The company also offers a credit card, a high-yield savings account, cryptocurrency investing, and has been making a push into betting markets. These factors, along with others, make the stock well positioned to perform well over the long run.
Roku is a leader in the connected TV market. Its platform boasts over 90 million households and supports tens of billions of viewing hours each year. Roku makes most of its money from ads. Here’s the good news for Roku. As of December, streaming accounted for 47.5% of total television viewing time in the U.S., according to some estimates.
That number should keep on growing, and advertising dollars will follow TV viewing and engagement. That means a higher household count for Roku and higher sales from its core business. There is plenty of competition here, but Roku’s strong market share, coupled with its strong network effect, provides it with protection.
