Fifty-five percent of the adult population in the United States is invested in stocks, according to Statista. It is not unreasonable to conclude that all of these investors understand the importance of investing in stocks. However, just buying stocks does not guarantee success.
To be successful in investing, you need to choose your stocks carefully, buy them, and hold them for as long as possible. Adding growth stocks to your portfolio, for example, could grow your wealth exponentially over time, especially if those stocks follow megatrends. Here are four compelling growth stocks you can buy now and keep forever. Each is a bet on an unstoppable trend.
The potential of e-commerce is greater than you might think
The convenience of online shopping has not been lost on anyone, but the physical distancing made necessary by the COVID-19 pandemic has forced more people than ever to shop online, especially in once less popular categories like grocery store.
To give you an example, the online grocery market in India is expected to reach nearly $ 18 billion by 2024, up from just $ 1.9 billion in 2019. As an Indian, I can guarantee the growth of electronic commerce. I am one of the many consumers who rarely shopped online until last year; but now i have multiple subscriptions.
India is just one example. eMarketer predicts that the global e-commerce market will reach $ 4.9 trillion this year and nearly $ 6.4 trillion by 2024 compared to $ 4.3 trillion in 2020. E-commerce penetration in the United States on its own could more than double between 2020 and 2025, according to eMarketer. Obviously, this is a booming market and you will likely make a lot of money investing in a stock like Shopify (NYSE: SHOP), which allows merchants of all sizes to build online stores and sell products through multiple sales channels, revenue subscription, and value-added fees in return.
Shopify is in full swing, racking up gross merchandise volumes worth $ 42.2 billion in the second quarter and breaking the $ 1 billion mark in quarterly revenue for the first time. As a perspective, Shopify’s revenue in 2020 was $ 2.9 billion, up 86% from 2019.
There is huge potential as Shopify continues to roll out new features and services to expand its merchant and customer base beyond the United States.
An infallible bet on one of the biggest global trends
No mega-trend attracts more attention than clean energy, and rightly so: the threat of catastrophic climate change is forcing nations to decarbonize and build a cleaner future. And this clean energy revolution is only just beginning, which means if you invest in renewable energy stocks with global reach and with a proven growth strategy, you could end up with a lot of money in just a few years. only. Brookfield Renewable Power (NYSE: BEP)(NYSE: BEPC) is a perfect choice.
On September 8, the Department of Energy released a study showing how combined solar and wind power could provide 75% of the United States’ electricity needs by 2035, with solar taking the lead through its low cost. Brookfield Renewable is primarily focused on hydropower, but is growing at full speed in solar and wind. CEO Connor Teskey recently said he sees “no limit to the level of growth” the company could pursue in solar as it is the fastest growing renewable source in the world today. ‘hui. Management even recently predicted that a “majority” of the company’s production capacity could come from solar power within a decade.
Brookfield Renewable has years of experience and support from the parent organization Brookfield Asset Management (NYSE: BAM) to make the most of the opportunities in renewable energies. In fact, its nearly 31 gigawatt (GW) development pipeline far exceeds its current capacity of 20 GW and is already sufficient to fuel growth for years to come. Brookfield Renewable plans to increase funds from operations (FFO) per share by up to 20% through 2025 and dividends by 5% to 9% per year.
If 10% compound annual growth in FFOs and 6% dividend growth between 2010 and 2020 could generate such large returns for Brookfield Renewable shareholders, the sky could be the limit for investors wishing to hold the shares for decades.
There could be no upward limit for this multibagger stock
Holdings reached (NASDAQ: UPST) is largely a bet on two megatrends and combines the best of both worlds as a financial technology company using cloud-based artificial intelligence (AI) to disrupt the lending market.
Upstart does not lend money but uses AI to screen borrowers and grant loans to partner banks, and collects fees in return. As much of the process is automated, consumers can easily apply for loans with high approval rates. For banks, Upstart can help expand their customer base and reduce loss rates because it uses 1,000 or more variables and a history of over 10 million repayment events to filter borrowers. Upstart’s network of institutional investors also finances support for banking partners through secondary loan repurchases.
A promising technology that has already found several takers, it had 12 partner banks in December 2020. Upstart is developing at a dazzling pace as illustrated by the following data from its last quarter:
- Revenue jumped 1,018% to $ 194 million.
- Net income stood at $ 37.3 million from a loss a year ago.
- Loans issued jumped 1,604% to $ 2.8 billion.
Now here’s something to ponder: If Upstart can achieve such astonishing growth numbers just through personal loans, imagine what it could do once it enters new verticals. It, for example, entered the much larger auto loan business after the acquisition of Prodigy Software, and has already linked up with five banks. The volume of auto loan originations in the United States was $ 635 billion between the second quarter of 2020 and the second quarter of 2021, compared to $ 84 billion of personal loan originations.
Upstart is already profitable and expects to generate revenues worth $ 750 million in 2021 compared to $ 233.4 million in 2020. Yes, it has already seen a dizzying rise this year, but think long term: with Addressable markets this huge, Upstart shares could explode in the coming decades.
Stock could reach $ 100 billion as industry explodes
The COVID-19 pandemic has changed our lives in many ways. Perhaps the biggest trend he has started is virtual healthcare or online doctor visits without having to leave our house. Teladoc Health (NYSE: TDOC) recognized the opportunity before anyone else and today is the largest provider of virtual care services in the world. Yet the growth of the company has only just begun.
Industry experts predict that the virtual care market will experience double-digit growth in the coming years, with Frost & Sullivan even predicting that the US virtual care market will grow seven-fold by 2025. It may sound ambitious, but even if the markets can grow by half. , Teladoc could end up earning a substantial amount of money.
Teladoc was already the leading provider of virtual consultations before embarking on chronic disease management by acquiring Livongo Health last year. The global chronic disease management market alone could be worth $ 6.5 billion by 2027, up from $ 3.6 billion in 2020.
Teladoc is already growing rapidly: its revenue more than doubled in the last quarter, and with management projecting $ 2 billion in revenue this year, Teladoc will have nearly quadrupled its revenue in just two years. !
Teladoc is experiencing strong growth in various verticals like mental health and non-infectious diseases, and expects to see 13.5 million to 14 million visits this year, up from 10.6 million visits in 2020. Considering its pace of growth and market opportunities, I would like to ‘Don’t be surprised if Teladoc shares have reached a market capitalization of $ 100 billion as early as 2026, up from $ 22.7 billion today.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.