America is in a recession, but that doesn't make this is a bad time to invest. Recessions can be the best time to buy stocks because you can pick up quality companies at affordable prices.
Here are two stocks poised to beat the market because of their robust growth potential and strong brands.
The first pick is Walt Disney (NYSE:DIS), an entertainment company that can monetize its valuable intellectual property over a wide range of mediums. The second pick is Beyond Meat (NASDAQ:PENN), a meat-alternative producer with the potential for real returns. Both of these companies are great investments in July.
1. Walt Disney
Walt Disney is arguably the top entertainment brand in the world. And it monetizes its treasure trove of intellectual property through amusement parks, media networks, and online video streaming. While Disney is having a tough time during the coronavirus pandemic -- with park attendance plummeting and the stock falling by 19% year to date -- this is a great opportunity for investors to scoop up shares while they are still cheap.
Disney has begun reopening its U.S. theme parks with limited crowds and other safety precautions to prevent the spread of COVID-19. This move follows the successful reopening of several properties in Asia and Europe and comes just in time for the lucrative summer season.
While investors should expect continued weakness in Disney's fiscal third-quarter report (expected on Aug. 4), the company is working toward putting the pandemic in its rearview mirror.
On the streaming side of things, Disney's Disney+ platform is evolving into a serious contender against established players like Netflix and Amazon.com's Prime Video. Disney+ has a natural advantage in sports-related content because of its ESPN network and partnerships with major sports leagues like the NFL, NBA, and UFC. The streaming service is expanding into eight additional European countries this September.
2. Beyond Meat
Beyond Meat is one of the most recognizable names in the rapidly growing market for plant-based protein. The company leverages its first-mover advantage to secure partnerships with some of the world's top restaurant brands, helping its products stand out from the competition in grocery stores. Meat substitutes are easy to replicate, but Beyond Meat can overcome these challenges with its brand recognition.
Beyond Meat's business model has led the stock to outperform the market with a staggering 78% year-to-date rally. And the company is poised for continued growth as its business expands internationally.
In July, Beyond Meat teamed up with Alibaba's Freshippo to sell meatless burger patties in mainland Chinese grocery stores. The company will start in Shanghai before rolling out to select locations in Beijing and Hangzhou in September. This follows an earlier move to supply Starbucks and Yum China's KFC, Taco Bell, and Pizza Hut restaurants.
The Chinese expansion could set the stage for further inroads into countries like India with large vegetarian populations.
Beyond Meat's revenue grew 239% to $297.9 million in the first quarter. International sales made up around 8.4% of the total and remain a major growth opportunity for the company going forward. Beyond Meat's products are now available in 74 countries outside the U.S., and it is developing an international supply chain with a new manufacturing facility in the Netherlands.
Investors can still win in this challenging economic environment by investing in companies with strong growth profiles and world-class branding power. Walt Disney and Beyond Meat fit the bill, making them great stocks to buy in July.