Mastercard Inc (MA), Philip Morris International Inc. (PM): The Key to Making Money in the Market

This free cash flow has allowed the company to buy back stock and drop net debt by 20% over the past five years. Shareholder equity has grown a staggering 60% over the same period – around 12% a year. Shareholder equity per share has risen from $12 to $17 since 2009, a very impressive rate of growth.

With AMEX’s operations virtually running themselves, this rate of growth, value creation and investor returns should continue for a long time to come and will make investors extremely wealthy.

Conclusion

The best way to get rich is to invest in companies that generate long term value and cash. Cash generative operations, products that give companies pricing power and businesses that run themselves are all key in long-term value creation.

The key to making money over the long-term is to buy shares in companies with these three key attributes and forget about them, letting the investment slowly gain in value.

Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool recommends American Express, DirecTV, and MasterCard. The Motley Fool owns shares of MasterCard and Philip Morris International.

The article The Key to Making Money in the Market originally appeared on Fool.com.

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