For many of us, 2020 can’t end soon enough.
Here’s a way to pass the time while you’re counting down the days: consider your investing plan – the one you’re going to have for the next decade, that is.
A new report from research and analytics provider Morningstar offers some suggestions. It’s titled “24 stocks for 2030,” but you don’t need to wait nine years to buy their picks.
But wait, you say – it was impossible to predict anything that happened in 2020. How on earth can anyone look so far ahead? Morningstar says it encourages investors to buy and hold for the long term – and one of the priorities it analyses is a company’s competitive advantage, not its recent quarterly performance.
With that in mind, here are the five themes the company is highlighting, along with some of their most highly-rated stocks to express each idea.
Cannabis: Morningstar forecasts the $10 billion U.S. market to grow to more than $80 billion by 2030. Aphria APHA, -0.82% is their top-rated stock pick for the category, with five stars.
5G: Companies that enable 5G-related services, like semiconductors and equipment vendors, stand to benefit from the new network. Among Morningstar’s recommendations, Nokia NOK, -1.85% gets four stars.
Electric vehicles: By 2030, one in five cars will be powered by electricity, Morningstar forecasts. But it should only take until 2025 for electric vehicles to be as cost-effective and functional as internal combustion engine-powered vehicles. Morningstar’s two five-star picks in this category are BMW and Sociedad Quimica Y Minera De Chile SA. The only U.S.-domiciled company in the list, General Motors Co. GM, -1.17%, gets four stars, and the firm notes it has no economic moat.
Renewable energy: It should account for 22% of electricity generation by 2030, a hefty increase from the 7-8% share it now represents, Morningstar thinks. “We think wind growth estimates are overstated and that solar will be the key disruptor,” they add. Edison International EIX, +0.57% is a company that invests in the infrastructure to support renewable energy. It gets four stars from Morningstar analysts.
Big pharma/biotech: Like many analysts looking at the space, Morningstar thinks big advances in science – cell therapy and gene therapy, to name a few – will transform pharma and biotech in the coming decade. Roche ROG, -0.25% gets five stars in this category, and Morningstar deems its economic moat to be “wide.”