From plunging straight down to rocketing straight up, the 2020 investing roller coaster has been a ride that none of us could have expected. As the calendar turns, several companies are staying hot and setting new all-time highs.

For those who don't need the money in their second stimulus check for immediate needs or to build up their emergency savings, and instead are in a position to invest it in stocks, CrowdStrike Holdings (NASDAQ:CRWD), United Parcel Service (NYSE:UPS), and Sherwin-Williams (NYSE:SHW) look like solid bets. Each company offers a different risk/reward profile, so you can invest in a way that's best for you.

A close-up of a green key on a keyboard that reads Buy Stock.

Image source: Getty Images.

1. Hypergrowth: CrowdStrike

Shares of CrowdStrike have rocketed an astounding 325% in 2020 -- and for good reason. The company is a leader in cybersecurity, an industry that's becoming increasingly important. The recently revealed hack of U.S. government agencies reveals just how high the stakes can be.

The meteoric rise of CrowdStrike's share price is backed by its impressive growth numbers. It roughly doubled its revenue between fiscal year (FY) 2019 and FY20 and is poised to nearly double revenue again in FY21, the fiscal year that ends Jan. 31 2021. 

Metric

Latest FY21 Guidance

Initial FY 2021 Guidance (Midpoint)

FY2020

FY2019

Revenue (millions)

$857.5

$728.4

$481.4

$249.8

Non-GAAP net income

$50.6

($25.7)

($65.6)

($115.8)

Data Source: CrowdStrike Holdings. GAAP = generally accepted accounting principles.

CrowdStrike now expects to earn nearly 20% more revenue in FY21 than it originally forecast, not to mention notch its first profitable year (in adjusted numbers). These headline numbers seem to be driven by CrowdStrike growing its services offering and generating more revenue per customer. This is a big point. If CrowdStrike's existing customers are willing to spend more money and adopt its new services, it's creating something that the market values. 

Picking up a few shares of CrowdStrike could be a good choice for investors looking for a red-hot growth stock. But keep in mind that the company is trading at a sky-high price-to-sales (P/S) ratio of 63. It will need to continue growing at a fast pace to justify its premium price. 

2. Growth/income: UPS

Between 2010 and the end of 2019, UPS gave investors a 111% total return. That's impressive, but a far cry from the market's 210% return. This decade is going much better. UPS is thriving during this recession as it produces quarter after quarter of blowout results.

Like other transportation stocks, UPS has benefited from folks staying at home and shopping more online. But what's taken UPS the extra mile is its investments in serving e-commerce, healthcare, and small- and medium-sized businesses (SMBs).

These thriving revenue streams, along with its international segment, are driving UPS' growth. Record revenue is helping the company invest further in its business and pay down debt. 

UPS Revenue (Quarterly) Chart

UPS Revenue (Quarterly) data by YCharts.

2021 should be a pivotal year for UPS. Investors would do well to watch how the company's business-to-business (B2B) revenue fares as the economy reopens. Even more important will be retaining progress in e-commerce and SMBs. If those customers stick around as part of permanent shifts from retail to online sales, UPS could have another banner year in 2021. In the meantime, UPS is rewarding investors with a 2.4% dividend yield at the current stock price. Its payment has been rising for 20 years and should continue increasing for years to come. 

3. Dividend Aristocrat: Sherwin-Williams

Sherwin-Williams hasn't trounced the market like CrowdStrike or tripled it like UPS. But it produced a more-than-respectable 26% total return in 2020, which just so happens to be the average annual return it's given shareholders over the past 10 years. 

CRWD Total Return Level Chart

CRWD Total Return Level data by YCharts.

Sherwin-Williams operates three main segments: the Americas, performance coatings, and consumer brands. The Americas group is generally the company's best-performing segment and includes Sherwin-Williams' name-brand products sold through its field sales representatives and company-operated stores. The segment  generated over $10 billion in 2019 sales, a first, which represented 57% of overall sales.

Its second-largest segment, performance coatings, comprised 28% of 2019 sales. More industrial in nature, this division has struggled the most from the pandemic. Sherwin-Williams is guiding for segment revenue to fall mid-single digits for 2020. 

Finally, its consumer brands group generated 15% of 2019 sales, but it's been the best-performing segment in 2020. These are the non-Sherwin-Williams brands that the company sells through retailers like Lowes and Walmart. Sales have surged thanks to home improvement projects. Management expects the segment to finish the year up around 15%. 

2020 was a tough year for many industrial companies, but Sherwin-Williams' diversified business model proved, once again, that it can grow its top and bottom lines even during tough times. This brings us to Sherwin-Williams' most impressive metric -- gross margin.

Sherwin-Williams sports a 48% gross margin. Aside from large railroads and 3M (which is notoriously efficient and diversified), you'd be hard-pressed to find a large industrial/materials company with a higher gross margin than Sherwin-Williams. Its efficient business generates free cash flow (FCF) that far exceeds its dividend payment, allowing it to buy back shares, increase the dividend, and limit debt.

Sherwin-Williams has increased its dividend for 41 consecutive years, making it one of the longer-tenured members of the esteemed list of Dividend Aristocrats. Shares of Sherwin-Williams yield just 0.7%, but this is because its dividend increases haven't been able to keep up with its market-outperforming stock price.

Staying hot

2020 proved that paradigm shifts and sector tailwinds are a powerful thing. CrowdStrike and UPS benefited from the heightened importance of cybersecurity and e-commerce. Sherwin-Williams' diversified business model exposed it to short-term benefits while insulating it from macroeconomic headwinds.

All three stocks are hot right now and could very well stay hot as long as the fundamentals remain intact. However, it's worth reiterating that you should only invest your second stimulus check if you don't need the money in the short term. That way, you can endure volatility and let the long-term growth stories play out.