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In the current bear market, many investors might be hesitant to buy. However, I find it’s probably an ideal time to assess what to start buying.
In a previous piece, I looked at how you can instantly diversify your stock portfolio by geography. Continuing in that vein, I thought I’d dive deeper and look at five stocks I would buy and hold forever – even in this environment.
To remain consistent with my own approach, the five companies I’m outlining below are split between three international markets. Two are from the US, two are from China/Hong Kong and one is from Singapore.
Nearly everyone will be familiar with computing and cloud giant Microsoft Corporation (NASDAQ: MSFT). The company is known best for its Office 365 suite of services, Surface laptops and Xbox gaming consoles.
However, its fast-growing cloud computing business is probably one of the less-publicised parts of this money-making machine. The company grew its revenue by 14% year-on-year in its latest quarter, posting sales of a whopping US$36.9 billion.
Its Intelligent Cloud business, which includes the much-vaunted Azure, expanded by 27% year-on-year to US$11.9 billion.
What’s more, even though Microsoft shares only yield around 1.5%, the company pays a dividend. It has also been growing this dividend, having raised its payout for 16 consecutive years with its latest hike being around 11%.
The e-signature market is one area DocuSign Inc (NASDAQ: DOCU) dominates. However, the company has expanded its business to capture the whole agreement process – known as contract lifecycle management.
What marks out DocuSign is the company’s ability to do away with time-consuming paper agreements by making it easier for all companies to draft agreements. This can range from financial institutions to local and federal governments in the US.
Increasingly, the company is also seeing a greater share of revenue growth come from its international business. In the company’s latest quarter, it managed to expand beat consensus estimates to post revenue of US$274.9 million – up 38% year-on-year.
Tencent Holdings Ltd (SEHK: 700) is a name all investors in Hong Kong’s stock market will know. No doubt, it’s held up relatively well in the recent coronavirus-induced bear market. But its varied businesses mean investors are also given a level of protection by owning its shares.
The firm’s stranglehold on the domestic Chinese gaming market is well known and its growing influence in the international market sets it up for future growth.
The tech giant is set to continue growing as more and more people use its services, from gaming to online financial services and the cloud.
4. Ping An Insurance
The financial conglomerate and insurance provider Ping An Insurance Group Co of China (SEHK: 2318) is a veritable giant. It has a market capitalisation of over US$170 billion and has multiple technology divisions. These are trying to digitise the notoriously old-fashioned financial sector.
Like all stocks, it has suffered on the recent coronavirus outbreak. However, many observers believe when the recovery comes that it will benefit as consumers in China become more cognisant of purchasing life and health insurance.
Additionally, the company pays a solid dividend that has grown strongly. It clocked a compound annual growth rate of 40.1% in its dividend between 2015-2019.
5. Mapletree Industrial Trust
Mapletree Industrial Trust (SGX: ME8U), a solid Singapore-listed real estate investment trust (REIT), rounds out my top five. It owns industrial properties in Singapore as well as data centres in Singapore and North America.
The REIT’s unit price has been hammered by the recent market selloff but it has solid financials and gearing of 33.1% as of 31 December 2019 – well below the regulatory ceiling of 45%.
Furthermore, being backed by a strong sponsor means it will have credit lines available to it in times of crisis (like the current coronavirus one).
Furthermore, REITs, as readers should be aware, are required by law to pay out 90% of their net income as dividends. So, income will continue to flow to investors no matter what.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Tim Phillips owns shares in Microsoft Corporation, DocuSign Inc, Tencent Holdings Ltd, Ping An Insurance Group Co of China and Mapletree Industrial Trust.