This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) and its CEO and significant shareholder, Elon Musk, frequently make the news. It's not always positive, with Musk's potentially $1 trillion dollar pay package vote garnering sharp reactions.

But looking purely at the stock's performance, how much would you have today had you invested $5,000 in Tesla shares a year ago? 

A volatile stock

Tesla's stock has certainly been volatile. The shares have a 52-week low of $214.25 and a high of $488.54.

Through the ups and downs over the last year, Tesla's share price rose 8.8% through Dec. 11. However, the S&P 500 index went up 13.4%. While Tesla doesn't pay dividends, the S&P 500 had a total return of 14.8% after including the payouts.

That means your $5,000 investment would be worth $5,444. That's below the $5,737 if you'd invested passively in the S&P 500.

A look ahead

Tesla's stock has certainly rewarded investors with market-beating returns over the long term. Over five years, the shares' 126% appreciation beat the S&P 500's 102.4% return.

With growing competition in the electric car industry and U.S. tax incentives disappearing, its core automotive business' growth has slowed. Third-quarter automotive revenue increased 6% year over year to $21.2 billion.

Musk has promised a future of artificial intelligence, robotics, and self-driving cars. It's unclear if and when these initiatives will pay off. Given the long wait and current climate for its core business, I'd pass on Tesla shares right now. For those investing, you should prepare yourself for the stock's wild price swings. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post If you had invested $5,000 in Tesla stock 1 year ago, here's how much you would have today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

When people think about Apple (NASDAQ: AAPL), products like the iPhone likely come to mind. But long-time investors probably think more about the company's stock, which has rewarded shareholders with a 532% appreciation over the last 10 years through June 9. That's easily outpaced the S&P 500 index's 189% gain.

Apple has also become a reliable dividend payer since restarting payouts in 2012. It's good to know that the board of directors has committed to making regular payouts. It's particularly useful if you're targeting a specific annual total, such as $1,000.

Dividend support

First, it's essential to check on whether Apple can support the current dividend. Fortunately, the company produces plenty of free cash flow (FCF) that should give investors confidence.

In the first six months of the current fiscal year, which ended on March 29, Apple's FCF totaled $47.9 billion, and it paid out $7.6 billion in dividends.

Now that we've confirmed Apple's ability to sustain its dividends, it's time to turn to the number of shares needed to produce $1,000 in yearly dividends.

Share calculation

Apple raised its May quarterly dividend by a penny to $0.26 per share. While the board of directors has a history of annual increases, it's prudent to take a conservative approach and assume the dividend remains constant. Should the company continue to boost payouts, you'll receive more than $1,000 annually.

Multiplying the quarterly dividend by four works out to an annual dividend payment of $1.04 a share. To receive $1,000, you'd have to purchase 962 shares. Using the June 9 closing price of $201.45, those shares will cost about $194,000.

It's nice to receive secure dividends. However, with a 0.5% dividend yield, investors will hope capital appreciation will provide the majority of Apple's total return.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The Dow Jones Industrial Average got off to a solid start this year. The widely reported index, consisting of 30 large-cap stocks representing multiple sectors of the economy, gained 4.7% in the first month of the year.

While not all Dow index stocks did well in January, these five Dow stocks, which come from divergent sectors, vastly outperformed the index.

1. 3M

Industrial company 3M (NYSE: MMM) was the index's top performer in January with a 17.9% gain. Part of the stock's movement came after the company reported fourth-quarter results. Adjusted sales, which remove acquisitions/sales and foreign currency effects, grew 2.1% compared to a year ago. Diluted earnings per share (EPS) fell 1.2% to $1.68.

2. International Business Machines

International Business Machines' (NYSE: IBM) shares soared 16.3%. Its fourth-quarter sales increased a tepid 2% after removing the effects of foreign currency translations. However, investors were undoubtedly pleased about IBM's progress on the generative artificial intelligence front with management reporting its book of business grew to $5 billion.

3. Goldman Sachs

Goldman Sachs' (NYSE: GS) stock price leapt 11.8% last month. The financial services company reported strong fourth-quarter results. Quarterly revenue grew 23% year over year to $13.9 billion, and diluted earnings per share more than doubled to $11.95.

Its businesses span investment banking, trading, asset management, and other banking services such as credit cards.

4. JPMorgan Chase

JPMorgan Chase (NYSE: JPM) saw its share price increase 11.5% in January. The banking giant reported fourth-quarter revenue grew 10.9%, driving diluted earnings per share more than 58% higher.

JPMorgan Chase's businesses include banking for consumers and businesses, investment banking, and asset management.

5. Amgen

Amgen's (NASDAQ: AMGN) shareholders were undoubtedly pleased with the stock's 9.5% appreciation. Although no specific news seemed to drive the price increase, the company has a history of developing treatments for ailments such as heart disease, cancer, and osteoporosis.

Given people need their medications, Amgen's results tend to do well no matter what happens with the economy and people's personal finances.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lawrence Rothman, CFA has no position in any of the stocks mentioned. JPMorgan Chase is an advertising partner of Motley Fool Money. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 3M, Goldman Sachs Group, International Business Machines, and JPMorgan Chase. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Amgen. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It might be hard to imagine, but Amazon.com Inc (NASDAQ: AMZN) began only 30 years ago as an online bookseller. Now, the site sells a wide range of goods. The business has grown quickly and includes the popular Amazon Prime subscription service, electronic devices, and Amazon Web Services (AWS).

The company's shares have also generated a lot of wealth for investors. Investors who bought shares a decade ago and held them would have seen an increase of almost 1,000%.

Trouncing the market

Amazon's initial public offering (IPO) was in 1997 when its sales were about $148 million. The figure grew to nearly $575 billion last year.

But you don't have to have bought the shares at the IPO price to make a lot of money. Over the last decade, Amazon's shares have appreciated 945%, easily outperforming the S&P 500's 227% total return.

Even starting with a relatively small $1,000 just 10 years ago, you would now have about $10,500. Placing the same amount in the S&P 500 would've resulted in about $3,300.

Amazon's stock will likely have a hard time reproducing those kinds of returns over the next 10 years, but that doesn't mean they aren't worth buying.

Amazon shares have a price-to-earnings (P/E) ratio of 39, much higher than the S&P 500's 27 multiple. That suggests the market has high expectations for Amazon's growth.

Cloud computing business AWS remains the company's main profit generator. The unit's sales grew 18.6% to $26.3 billion in the most recent quarter, and operating income went from $5.4 billion to $9.3 billion.

It also has the highest operating margin, 36.5%, among the company's three segments. Given the business's demand for data, prospects look good, and the artificial intelligence push could give the business a further boost.

However, given the relatively high valuation, you may want to employ dollar-cost averaging to purchase shares over time. That way, you invest small sums at regular intervals and won't have to worry about timing the market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post If you'd invested $1,000 in Amazon stock 10 years ago, here's how much you'd have today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

When looking for long-term stock holdings, following multi-billionaire Warren Buffett's investments is a good place to start. He's certainly built a long-term track record, but he's also known for his patient approach. One of his sayings is, "Our favorite holding period is forever."

It's tempting to follow Buffett's stock picks blindly, but you still should do your own homework. After all, he's not infallible. These two stocks have been a part of Berkshire Hathaway's portfolio for some time. While their prices are down for the year, both offer excellent long-term growth prospects, presenting a wealth-creating opportunity.

1. Amazon

Amazon's (NASDAQ: AMZN) stock investors have become a little skittish this year. The stock has dropped by more than 37% since the start of 2022, making this a good time to evaluate the company's long-term growth prospects. Fortunately, these look solid.

Looking at Amazon's first-quarter results, sales grew 9% to $116.4 billion, excluding foreign currency exchange translations, but operating income was down by over 58% to $3.7 billion. While this isn't great, it looks likely that Amazon will get back to growing profits down the road. That's because higher costs weighed on profitability as management increased staffing and capacity to meet surging demand, but management has pledged to focus on higher productivity and efficiency.

Even better, its fast-growing, high-margin Amazon Web Services (AWS) business still has bright prospects. In the latest period, AWS' sales increased by 36.6% to $18.4 billion, driving operating income 56.6% higher to $6.5 billion. It was the only segment to report a profit in the latest period.

With an over 35% operating margin, this dwarfs the North American and International segments, which are typically single-digit figures. AWS, the leader in the fast-growing cloud computing business with a 33% market share, faces little competition. Its main rivals are Microsoft's Azure and Alphabet. Better still, the business has significant barriers to entry due to the high cost and space needed for data centers.

The price-to-earnings ratio (P/E) of 50.4 is well below the 80 times it was selling for in April. While Amazon's P/E is higher than the S&P 500's 20 times, as Warren Buffett has stated, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

2. Moody's

Moody's (NYSE: MCO) stock may have fallen by about 31% this year, but the company's long-term competitive position remains strong. So this looks like an opportune time to purchase shares. 

The company has become known for providing ratings on debt instruments issued by corporations and countries, among other entities. Along with S&P Global, it has a dominant share of the market, with Fitch Ratings coming in a distant third place. Last year, this business produced revenue of $3.8 billion, accounting for over 61% of the total.

There's also its analytics business, which represented the balance of Moody's revenue. While the rating business' results can fluctuate, depending on the economic cycle and debt issuance, this business is steadier since it charges subscription fees for items like data and information.

Moody's first-quarter revenue fell by 4.9% to $1.5 billion. However, the period showed the benefit of having the fee-based analytics business. While the rating business' revenue declined by 20% to $827 million, analytics increased by 9% after excluding the impact of acquired businesses.

The stock currently has a 26 P/E multiple, much lower than the roughly 32 times when 2022 began. With a strong ratings business that will certainly rebound when the markets recover and a growing analytics segment, the stock looks like a bargain for long-term stock investors.

Two stocks to celebrate down the road

Amazon has a strong brand in retailing, but it's become so much more than an online seller. It generates considerable revenue and profits from its AWS business, which looks like it can continue growing quickly for a considerable period. Moody's franchise includes ratings, which debt issuers pay for and many people rely on, plus a steadily growing analytics business.

When you add in that these two stocks currently sell at a much lower valuation than earlier in the year, long-term investors who purchase them likely will have a lot to celebrate when looking back to this moment. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lawrence Rothman, CFA has no position in any of the stocks mentioned. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Berkshire Hathaway (B shares), Microsoft, and Moody’s. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Costco Wholesale Corporation (NASDAQ: COST) and McDonald's Corp (NYSE: MCD) are venerable companies that have proven popular with consumers over many years. They have become dominant through their focus on providing value to customers.

Last year's results took divergent paths, which each stock reflected. Costco's stock price increased by 28%, besting the S&P 500 Index (INDEXSP: .INX) 16%. Meanwhile, McDonald's shares underperformed the overall index with a more than 8% gain.

But the market typically looks at short-term results. To figure out which is the better long-term stock investment, it is time to dig deeper into each company's prospects.

A popular destination

With more than 39,000 establishments in more than 100 countries, McDonald's golden arches are perhaps the restaurant industry's most recognisable symbol. However, it doesn't own the majority of restaurants. Rather, it franchises 93% of them, in which the franchisees pay McDonald's an upfront fee plus an ongoing percentage of its sales. It is also a landlord in many instances, so it also receives rent.

Heading into 2020, McDonald's, with its inexpensive food and quick service, was doing well. Its 2019 comps rose by 5.9%, with higher guest counts contributing one percentage point. This was due to changes management implemented, such as all-day breakfast, new menu items, and a focus on the "3 Ds"– digital, delivery, and drive-thru. The company's operating income grew to $9.1 billion, 27% higher than 2015's $7.1 billion.

Last year, with governments imposing social distancing guidelines, was a different story. Still, results showed an improvement in the third quarter as governments relaxed restrictions, and its previous push of the 3 Ds proved fortuitous. Comps were down 2.2%, but they did better each month.

While cases are surging, creating some near-term uncertainty as governments and people react to contain the virus, McDonald's long-term prospects look promising with its affordable menu that it is constantly tinkering with to adapt to consumer preferences (including reintroducing the popular McRib for a limited time), and the company continues to push the 3 Ds.

The company's dividend track record, raising it for 44 consecutive years since its first payout in 1976, is impressive. This includes boosting December's payment by 3% to $1.29. The stock's dividend yield is 2.4%.

Offering members a good value

Costco is not your typical retailer. It operates warehouses that offer a variety of goods sold in bulk and services at lower prices than members can typically find elsewhere. It charges members to shop there, and they happily sign up and stay on. The number of paid memberships has grown from 47.6 million to 58.1 million over the last five years. It consistently has a nearly a 90% renewal rate worldwide.

With positive same-store sales (comps) for many years and increased profitability, Costco is executing its plan to serve members by offering them high-quality merchandise at low prices. Over the last five years, its operating income grew by nearly 50% to $5.4 billion.

The company got off to a good start in 2021, too. For its first fiscal quarter, which ended on Nov. 22, comps were up by 17.1% after excluding gasoline price changes and foreign currency exchange translations. Costco's operating income increased by 35% to $1.4 billion.

Costco's success is leading management to continue opening new warehouses. Historically, it added 20 to 25 clubs annually. It ended last year with 795 and opened eight in the first quarter, with plans to add 20 to 22 for the year.

The company has also built an impressive track record of raising dividends annually since its initial payment in 2004. Its 0.7% dividend yield pales in comparison to some companies, but it has bright growth prospects. Costco has also paid large, special dividends to shareholders every few years, including a $10 payment last month.

The decision

Choosing between Costco and McDonald's is a tough call. Both are well recognised, popular destinations. For me, Costco comes out ahead due to its ability to draw in members based on its offerings, which have produced consistently improving results.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Costco Wholesale. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.