While the Great Recession was devastating for millions of individuals, the decade that followed was generous to investors. From a marketer’s perspective, the 2010s will forever be remembered as an era of slow but steady gains on Wall Street, and a period of sustained growth for investors and their retirement accounts,” explains John Divine, a senior investing reporter for U.S. News & World Report.
“Characterized more by incremental progress than explosive growth, the 10 years from 2010 to 2019 also saw a remarkable lack of volatility, with few setbacks,” adds Divine. And, everything continued to look bright heading into 2020.
Of course, the world was ravaged by COVID-19. In addition to disrupting the market, there was also a trade war between the U.S. and China and a lot of uncertainty going forward. But that doesn’t mean that you should panic.
As long as you’ve built an emergency fund, don’t have too much high-interest debt, and can remain calm to avoid panic-selling, investing in stocks remains an essential long-term wealth-building tool. But, what stocks should you consider if you want to build your wealth for the foreseeable future? Well, here are 10 stock options that you might want to check-out.
1. Amazon (AMZN)
Let’s be honest. You can’t really go wrong with any of the “FAANG” stocks — Facebook, Amazon, Apple, Netflix, and Google (Alphabet). But, Amazon deserves to be on your radar.
Before COVID-19, Amazon already established itself as a consistent performer. Moreover, the company has a loyal fanbase, Prime usage was rising, and its AWS platform is the cloud leader. Following the pandemic, online shopping skyrocketed — in the third quarter; the company had $96.1 billion in net sales; it was $70 billion in 2019.
More appealing? We haven’t even completely entered the holiday season yet. As for next year, between the pandemic and more people working from home, expect Amazon’s eCommerce performance and AWS cloud platform to deliver.
In short, Amazon is a safe bet that will help you sleep at night. As such, it should definitely be in your portfolio over the long term.
2. Alibaba Group Holding (BABA)
Alibaba is pretty much the Chinese counterpart to Amazon, with elements of Google and PayPal sprinkled in. In addition to being an eCommerce juggernaut, it also has a cloud-computing business similar to AWS. What’s more, there’s also a digital and entertainment segment, and it hosts the biggest eCommerce event in the world, the 11.11 Singles Day
Over the last quarter, its earnings have grown steadily at 21 percent. Back in August, Alibaba also reported a 15% rise in quarterly profit. And sales increased by 30% to $21.76 billion.
And, just like Amazon, don’t expect online sales to plummet anytime soon. Furthermore, there’s talk that Alibaba will be investing $300 million in online luxury fashion retailer Farfetch.
3. Zynga (ZNGA)
If you’re not a gamer, then the name Zynga might not ring a bell. However, I’m sure that you’re at least somewhat familiar with the games they’ve released over the last decade. These include titles like FarmVille, Words With Friends, and Empires & Puzzles.
Gaming was already a $68.9 billion global business in 2019. But, thanks in part to the coronavirus, that has soared to $159 billion in 2020. But, Zynga, in particular, has been crushing it.
Revenue has over surged 47% in their last quarter. As for bookings, that also increased by a healthy 38% since the prior year’s second quarter. “Beyond the record revenue and bookings, Zynga just posted its best operating cash flow in more than eight years,” Rick Munarriz notes in The Motley Fool.
“Zynga is already sporting strong organic growth, but this summer it gobbled up Turkish developer Peak Games to kick its growth and portfolio up a notch,” adds Munarriz. “We’re not putting our phones down anytime soon, and Zynga has excelled at the art of ramping up well-received titles while quickly moving on from the less inspiring releases.
During the summer, “the stock briefly poked its head into the double digits,” which is a feat Zynga has not accomplished in more than eight years. “It has pulled back in recent weeks, giving outsiders a chance to get in before the stock resumes its upward ascent.”
Even more alluring? Zynga stocks are also trading below $10. So, expect this one to break out in 2021.
4. Corning (GLW)
Corning is a multinational company that specializes in glass, ceramics, and related materials. However, it’s also known for its technology ventures, such as offering optical communication solutions for 5G carriers. In fact, the company is currently working with Qualcomm to create efficient indoor 5G networks.
“During the second quarter of 2020, Corning’s revenue and adjusted earnings per share (EPS) increased by 7% and 25% compared to first-quarter 2020, to $2.6 billion and $0.25 respectively,” writes Zhiyuan Sun. Moreover, “Corning recently received a $204 million grant from the Biomedical Advanced Research and Development Authority (BARDA) to increase the production capacity of its pharmaceutical glass vials, which are used to make COVID-19 vaccines and drugs.”
“Corning is also witnessing increased demand for specialty materials for smartphones, with sales up 13% year over year, and for the automotive particulate filters and TV displays it manufactures,” adds Sun.
There’s even more good news. The company’s stock is incredibly cheap. It “trades for just 2.7 times sales and 29 times free cash flow while having a debt-to-equity ratio of only 0.35,” Sun states. “For investors who are passionate about 5G stocks and are looking for players with ample diversification, Corning is a top pick.”
5. PayPal (PYPL)
At the start of 2020, PayPal was considered a long-term winner. Following the pandemic, however, demand for contactless payments has swelled. Additionally, the increase in eCommerce growth and a Venmo-branded credit card makes PayPal even more attractive.
While it’s not cheap to invest in PayPal, the consensus is that PayPal will generate $4.55 in earnings per share next year. Overall, this is one of the best picks if you’re looking for long-term growth potential. And, if you’re worried about the shaky market, PayPal is often considered a recession-proof stock.
6. Crown Castle International (CCI)
2020 hasn’t been kind to real estate investment trusts (REITs). However, that hasn’t been the case with Crown Castle International.
CCI is a cell-tower REIT that’s “very well positioned to both ride out the current storm and continues to perform admirably in whatever economic conditions follow,” explains Charles Lewis Sizemore, CFA for Kiplinger. “Crown Castle owns, operates, and leases more than 40,000 cell towers and 80,000 miles of fiber cable spread across the United States.”
Regardless if working from home becomes permanent, “we’ll be using more mobile data with every passing year,” adds Sizemore. As such, it’s anticipated that there will be continued growth for Crown Castle — who just so happens to lease out its infrastructure to carriers like AT&T and Verizon.
“And in an era in which many REIT dividends are getting slashed, Crown Castle yields a safe 3%. That payout has grown 46% over the past five years,” concludes Sizemore.
7. Healthpeak Properties (PEAK)
Speaking of REITs, Healpeak Properties is another unique investing option. The first reason is that despite being a REIT, it still trades like a stock. That means it comes with tax advantages and respectful dividend payouts.
But, here’s what makes PEAK really intriguing. It specializes in life sciences, medical offices, and senior housing units. Considering that by 2030, all baby boomers will be age 65 or older, there’s definitely potential for growth here.
And, according to 12stocks, “the weekly return of Healthpeak Properties (PEAK) is up 2.86% and is outperforming the overall market by 1.75%.” And, the outlook looks good for all trends.
8. Eli Lilly & Co. (LLY)
If you’ve never heard of this pharmaceutical company before, then it should certainly be. The company is currently working on a treatment for the novel coronavirus. It’s actually currently in phase 3 of its study.
“With a beta of just 0.22, investors in Lilly today are not taking outsized risks to generate returns going forward,” notes Money Morning. “As a pharmaceutical company with steady and quantifiable cash flows, there is little to fear about the future when owning a stock like Lilly.” In fact, “the company has total cash of $2.4 billion on hand and is growing earnings significantly year over year.”
LLY is also expected for a 6.7% revenue growth to $25.4 billion. Besides a COVID vaccine, the biotech company is working on treatments for migraines and diabetes. And, as if that weren’t enough, it’s also considered a rock-solid dividend.
9. Microsoft (MFST)
You may initially assume that Microsoft isn’t a sexy stock deserving of your investment. But, you can’t complain about its consistent performance and growth potential. Most notably is that it’s still an operating system powerhouse — consumer products and cloud services revenue grew 13% in the first quarter of its fiscal 2021 year.
In addition to that, the new Xbox gaming console will be hitting shelves this holiday season. Also, the company hasn’t been impacted by the U.S.-China trade war and recession-proof. And, unlike its FANG competitors, it is not a target of antitrust regulators and politicians.
10. Cabot Oil & Gas (GOG)
There are nine S&P companies projected to have profits jump 50% or more on 28% or higher revenue next year. These include Align Technology and Illumina, both in the health care sector and Freeport-McMoRan (materials). Consumer discretionaries like TJ Maxx, Ross, Ralph Lauran, and Hilton are also mentioned.
But, there’s also Cabot Oil & Gas. The 2021 estimated growth for the independent gas exploration and production company is 37.3%. The 2021 EPS estimated growth is 208.0%.
“While natural gas has been volatile, the company has been able to perform well due to its cost-cutting initiative,” adds investment analyst David Cohne. “COG reduced its 2019 finding and development costs by 5.13%. As management continues to improve efficiencies, the company should see high-profit margins going forward.”
Additionally, the company has a “solid balance sheet as its total assets are nearly double its total liabilities.” COG has “also committed to returning 50% of its free cash flow to shareholders in the form of share buybacks and dividends,” states Cohne.
“COG’s earnings are projected to grow an unbelievable 194.9% next year, while its average annual five-year growth forecast is still an impressive 26.1%,” Cohen writes. “The stock is rated a “Buy’ in StockNews POWR rating system.
It also holds an “A” for Trade Grade and Peer Grade. A “B” for Buy & Hold Grade. And, COG was ranked third out of 97 stocks in the Energy – Oil & Gas industry.
