Adapting his words to the Russian mentality, I want to compare stocks with real estate. Real estate is bought for years, decades and even inherited. In this case, it reliably preserves capital and protects it from inflation.. Its value only gets higher over time..
Likewise with stocks, which are shares in the company. The purpose of the investment is, to select an effective long-lived company and keep its shares for as long as possible. The company will make money, business to rise in price, and the investor - to get rich.
One day, an elderly investor will be able to live happily on dividends, not worrying too much about the next pension reform, and then the children will inherit a lump sum in shares. Or they won't get it, if the investor at some point decides to live in grand style. This is already a matter of preference..
For those, who is interested in the long term, not immediate benefit, we have selected a list of Russian companies, who have every chance to outlive their investors and bring decent profits for a long time.
How did you choose
We have formed a long-term view of global economic trends, to highlight the most promising industries. In each of them, the most effective, in our opinion, companies. Then the investor is free to choose, what stocks and in what proportions he should add to his portfolio.
Long-term trends
In my subjective opinion, in Russia, warming would not hurt. But in developed countries, the prospects for global warming are considered a serious threat.. The course on ecology has been taken for a long time, but today it becomes truly decisive in matters of capital movement. Money goes there, where investors are waiting for a bright green future and leaving, where are the greenhouse gases, soot and gender inequality.
This means, that coal mining and coal generation immediately drop out of our list. The Shell use case is a prime example of this., what are the risks hanging over the oil industry. But the position of natural gas can be stable due to a lower carbon footprint and the absence of cleaner analogues with comparable properties..
The transition to green energy will require a lot of non-ferrous metals. Probably, more, what is currently mined in the world. Efficient growers with large inventories can be in an advantageous position.
High technology will remain at the forefront of the economy. The potential for digitalization of various sectors of the economy and society is still huge. But here we should not forget about the experience of the late 90s and get too carried away by companies., who, even after the IPO, could not prove the profitability of their business model. You shouldn't pay too much for popularity either..
No matter how far progress has gone, people will need organic food for a long time to come. As the population grows, the demand for it can only grow.. So agriculture and related areas may remain in widespread demand..
And finally, finance. Traditional banks are a thing of the past, but full-fledged financial ecosystems, probably, will remain relevant, like the stock markets with their infrastructure. Of course, given that, that socialism will not gain wide popularity again.
Promotions, who are not ashamed to leave to grandchildren
Sberbank is the undisputed leader of the financial sector
The largest bank in the country, well-resourced, several years ago embarked on the path of transformation into an ecosystem of interconnected digital services. System-forming status and presence in the composition of state shareholders strengthen confidence in the bank's reliability, and the development strategy outlines attractive growth prospects. With sufficiently strong and stable core business performance, the bank invests in the development of promising IT projects, which will support future growth and profitability.
TCS Group - stable growth, high profitability, advanced technologies
One of the few profitable fintech groups in the world. The Group brings traditional banking products online, simultaneously developing a whole ecosystem of various financial and non-financial services. The company is characterized by high rates of revenue and profit growth, as well as a high level of return on equity - 40% based on the results of 2020 G. Promising industry, high growth rates and high-quality corporate governance allow us to be optimistic about the future of the group and expect capitalization growth in future years.
NOVATEK - gas rate, coal abandonment and growth of the Asian economy
One of the most effective representatives of the Russian oil and gas industry, focused on gas export. Dockyard EBITDA margin 2018–2019. was 50%. EBITDA CAGR c 2013 on 2019 yy. was on the level 24%, proceeds - 19%. Focus on export protects the company from ruble exchange rate fluctuations. Political risks are reduced due to the indirect presence of the state (through Gazprom) among shareholders, On the one side, and the shares of large foreign partners in subsidiary projects - on the other. Replacement of coal-fired generation by gas in Europe and the growth of the Asian market will ensure long-term demand for the company's products.
Moscow Exchange is a key market player, which does not stop developing
The largest exchange in the country, having a dominant position in many segments of the financial market. The backbone status is complemented by high-quality corporate governance and stable financial results. Huge potential for the growth of individual clients, which began to unfold in 2020 G., can support the growth of the exchange performance for a long time. The share of investment in the structure of the population's savings still lags far behind the same indicator in developed countries. At the beginning of April 2021 G. deposits of individuals were about 33 trillion rub. Some of these funds may be gradually transferred to stock market, which will spur the development of the market in general and the income of the exchange in particular.
MMC Norilsk Nickel is one of the key suppliers of raw materials for the energy transition
IEA recently published a report, which highlighted the high demand of the world economy in non-ferrous metals in connection with the transition to green energy. MMC Norilsk Nickel is one of the largest nickel producers, copper and palladium in the world, what makes it a beneficiary of such trends. The availability of the resource base exceeds 30 years. The company is one of the most profitable in its industry and strives to implement the best corporate governance practices.
Rusagro - consolidation, diversification and export
Agroholding Rusagro is a widely diversified food manufacturer, which allows you to effectively manage the cost at almost all stages of production. The company is actively growing both naturally, and due to transactions M&A. Further consolidation of the industry and the development of exports of meat and agricultural products will support the holding's sales in the future.. The company generates high cash flow, but due to the consistently high CAPEX it is not traded so expensively, how could. The launch of new projects at full capacity and the growth of dividends may become an additional medium-term driver.
PhosAgro - low cost, stable dividends
One of the world's largest fertilizer producers. About 80% products are phosphate fertilizers, the production cost of which the company has one of the lowest in the world. The company is characterized by high margins, good growth rates for the industry (CAGR over 9% with 2014 G.) and high-quality corporate governance, taking into account the interests of minority shareholders. Dividends are channeled from 50% to 75% FCF depending on the debt load 4 once a year.
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