Many investors got cold feet when COVID-19 hit in March and the market crashed, but long-term investors weren't fazed by the dip. Even the greatest companies sometimes falter, but shareholders who hold on when times are rough will see the rewards. PayPal (NASDAQ:PYPL), Nike (NYSE:NKE), and Amazon (NASDAQ:AMZN) are excellent companies that will ride out any waves and can set you up for life.
Changing the way you pay
Most people have used PayPal at least once. The payment processing company and peer-to-peer payments service is the dominant player in online payments, which means it was perfectly poised to handle the pandemic and come out on top.
I must get an email every single day from another company that's teaming up with PayPal to provide easier payment options. The company has millions of partners in addition to clients. Total payment volume reached a record in the third quarter, increasing 36% as the economy moved online. Revenue also surged 25%.
Shifting shopping trends have made PayPal's sweet spot the new normal. That's great news for shareholders. Adobe Analytics is predicting that instead of Cyber Week this year, November and December are going to be Cyber Months. It's forecasting $189 billion in holiday e-commerce sales, a 33% increase over the prior year. Even when the pandemic comes to an end, digital shopping is not going anywhere.
PayPal has also done a great job of getting into new businesses. It has acquired various companies to keep it growing in new directions, such as Venmo's popular peer-to-peer payment app and Honey, a price comparison feature.
PayPal stock is up 95% year to date. Between its original business and innovative approach to payments, it should continue to rise in the future.
The leader in premium athletic wear
Nike is such a dominant brand that it has gone beyond its activewear niche to become the leading U.S. apparel company, with $37.4 billion in sales during fiscal 2020. While it was certainly hurt by the pandemic -- sales declined 38% in the fourth fiscal quarter, which ended on May 31 -- it's also benefiting from the shift to casual wear that intensified during COVID-19.
Nike flexed its digital muscle over the past few months as shoppers went online, and the company's investments in direct-to-consumer sales became a lifesaver. Sales through Nike's e-commerce business grew 83% in the first quarter of fiscal 2021, and digital accounted for 30% of total sales.
Don't worry about Nike's future prospects, either. The company keeps churning out new products and strengthening its community of Nike fans. "In this dynamic environment, no one can match our pace of launching innovative product and our Brand's deep connection to consumers," CEO John Donahoe said in the company's earnings report. "These strengths, coupled with our digital acceleration, are unlocking NIKE's long-term market potential."
Nike stock is trading at 79 times trailing-12-month earnings, which is a hefty valuation. But business is improving, and with its strong management, focus on product development, and digital prowess, investors can expect Nike to deliver high gains.
The king of e-commerce
Amazon's takeover of retail has been nothing short of spectacular. Expanding from books to practically every product in existence, the company has grown to become the second-largest U.S. company by revenue, right behind rival Walmart.
Amazon has been the go-to shopping destination during the pandemic. Net sales grew 37% last quarter, as Amazon maintained its dominance of e-commerce in the U.S. Profitability grew as well, as earnings almost tripled year over year, reaching $6.3 billion.
The online leader has been trying to get into storefronts for many years, specifically grocery: the main spending category for American consumers. It's making progress with its Go and Fresh stores, which feature cashierless technology. It's still working with pilot programs and has a long way to go until consumers fully embrace the concept, but Amazon has the power to keep going and make it work. It's also considering offering the technology to other retailers, giving it more ways to produce revenue efficiently.
The e-commerce king branched out into cloud computing over a decade ago with Amazon Web Services, which powers many companies' web offerings. It grew 29% in the third quarter and contributed 12% of sales.
Amazon has been a great investment historically, and there's so much more to see as it continues to dominate retail. While one share costs more than $3,000, there's still lots of upside for shareholders.