If there’s one thing the world’s best investors have in common, it’s that they tend to invest in high-quality companies. Warren Buffett, for example, has large positions in the likes of Apple and Coca-Cola, both of which are leaders in their industries.
Here, I’m going to highlight three world-class companies I’d invest in today. I think these stocks could be great investments for me in the years ahead.
A British champion
Let’s start with FTSE 100 firm Diageo (LSE: DGE). It owns some of the biggest alcoholic beverage brands in the world, including Johnnie Walker and Tanqueray.
I’m bullish on DGE for a number of reasons. One is that the company looks well-placed to benefit from rising levels of wealth in the emerging markets in the years ahead. Diageo believes that by 2030, millions more emerging market consumers will be able to afford its brands.
Another is that the company is currently buying back a ton of its own shares. This should increase earnings per share which, in turn, should boost the share price over the long run.
ESG awareness is one risk to consider here. Analysts at Jefferies believe that alcohol following in tobacco’s footsteps might be the “single biggest risk” to the share prices of alcoholic beverage companies.
Overall though, I see a lot of investment appeal in Diageo. The forward-looking P/E ratio here is currently 24, which seems reasonable, to my mind.
A major financial player
The next stock I want to highlight is Mastercard (NYSE: MA), which is listed in the US. It operates one of the world’s largest payments networks, helping consumers, merchants, and financial institutions move money safely and efficiently.
Mastercard has attractive growth prospects in both the short term and the long term, to my mind. In the short term, the company should get a boost from the return of travel, as it generates a lot of revenue from cross-border transactions.
Meanwhile, in the long run, it looks set to benefit from the shift away from cash. Over the next decade, trillions of transactions are set to move from cash to card.
Disruption in the payments industry is the biggest risk here, in my view. This is certainly something to monitor. With the stock trading on a P/E of around 35 however, I’m convinced the overall risk/reward proposition is attractive.
A tech powerhouse
Finally, there’s Nvidia (NASDAQ: NVDA). It’s the world’s most valuable semiconductor company.
The semiconductor market is experiencing huge growth as the world becomes more digital, and this is reflected in Nvidia’s recent results. In the final quarter of 2021, revenue was up 53% year on year to $7.6bn. That’s amazing growth for a company of Nvidia’s size ($600bn).
Looking ahead, I think this tech giant is likely to get much bigger. Nvidia is active in a number of markets, including the video gaming, data centre, artificial intelligence, autonomous vehicle, and metaverse markets. All of these industries look set for strong growth in the next decade.
It’s worth pointing out that Nvidia is a higher-risk stock. It’s expensive (forward-looking P/E of about 43) and it has historically been volatile.
As a long-term investor with a high-risk tolerance I’m comfortable with the volatility here though. I think this is a stock to hold for the long run.
