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Have $600? These 2 Growth Stocks Could Set You Up for Life

By Rachel Warren - Jan 15, 2021 at 6:40AM

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These companies were top growth stocks in 2020 and are still must-have buys in the New Year.

There are just a few days left until the IRS finishes distributing the second round of stimulus money to eligible recipients across the country. If you're reading this, it's likely that you've already received or are about to receive your check. Given the economic hardship millions of Americans are facing right now, it's understandable if you plan on using your stimulus check to pay bills, whittle down existing debt, or save for a rainy day.

On the other hand, if you're on solid financial ground, you might be considering where to invest your $600 stimulus check. While this dollar amount might not seem like much to work with, investing even a modest sum in stocks with superior long-term growth potential can set you on the road to building some serious wealth.

On that note, here are two invincible stocks that have stayed at the top of their game throughout the pandemic and can reap shareholders massive returns over the next few decades.

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Image source: Getty Images.

1. Zoom

Zoom Video Communications (ZM -1.32%) was one of investors' favorite work-from-home stocks in 2020. As a result, shares rose by a mind-blowing figure last year -- nearly 400% between January and December. A boost in remote working and widespread lockdown orders that forced an unprecedented number of people to stay at home for prolonged periods were catalysts of Zoom's surge in subscribers. While some of these subscribers may drop away in the coming months as a vaccine becomes more widely available and offices reopen, we aren't close to out of the woods of this pandemic. At the same time, many companies are transitioning their employees to permanent remote work.

Zoom also had an established track record of growth before coronavirus-related catalysts came into play -- the company's revenues jumped by 88% in its fiscal 2020 (ended Jan. 31). Subsequently, in the first three quarters of the company's fiscal 2021, it reported year-over-year revenue growth of 169%, 355%, and 367%. Zoom also reported that its segment of subscribers with more than 10 employees rose by 354%, 458%, and 485% year over year during these quarters.

Zoom continues to discover new ways to drive subscriber growth. Besides providing a platform for everything from remote working to virtual classrooms, Zoom is quickly establishing itself as a resource for medical providers who want to offer telehealth services to their patients. It's no secret that telemedicine is a highly lucrative industry that has flourished throughout the pandemic and is poised for continued explosive growth. Zoom's easy-to-use platform is well-known to the general public, which makes it an obvious choice for both private practices and hospitals launching virtual care services. 

The company also keeps growing its global footprint. Zoom announced on Dec. 15 that it will be opening a new Research and Development Center in Singapore, which will add hundreds of new staff to the company's roster of employees. According to management, "the new expansion will ensure Zoom's superior quality of experience, security, and reliability to its users across Asia Pacific." This recent development is a sign of Zoom's continued strength as a company and its ability to tap into new growth opportunities around the world.

Analysts are forecasting that Zoom can continue its triple-digit earnings growth streak for at least the next five years alone, which should also continue to drive the stock's price up as investors keep flocking to scoop up shares. Zoom still has plenty of unexplored growth potential, and investors who buy the tech stock now could see the proof in their portfolios for years to come.

2. Teladoc Health

Modern healthcare was seeing an uptick in telemedicine prior to 2020, and this growth won't simply erode once a vaccine is distributed. Teladoc Health (TDOC -0.52%) is undoubtedly one of the most prominent stocks capitalizing on this healthcare revolution. The stock is trading nearly 141% higher than it was 12 months ago, and Teladoc reported an 80% boom in revenue during the first three quarters of 2020 compared to the year-ago stretch.

Teladoc's leadership in telemedicine and substantial market share have enabled it to consistently generate performance that mirrors the emerging trends in this industry. And telemedicine is growing at an exponential rate. According to a report by Fortune Business Insights:

The global telemedicine market size was $41.63 billion in 2019. The global impact of COVID-19 has been unprecedented and staggering, with telemedicine witnessing a positive demand shock across all regions amid the pandemic...The market is projected to grow from $79.79 billion in 2020 to $396.76 billion in 2027 at a CAGR [compound annual growth rate] of 25.8% in the 2020-2027 period.

It's undeniable that the coronavirus pandemic has accelerated Teladoc's revenue growth -- the company expects to report roughly $1 billion in revenue for the full-year 2020. Its 2019 revenue was only $553.3 million. However, other trends outside of the COVID-19 pandemic continue to drive healthcare providers and patients to platforms like Teladoc's. Fortune Business Insights also notes that "the increasing prevalence of chronic diseases and out-of-pocket expenditure has led to a significant rise in healthcare cost" and that "the adoption of digital technologies and teleconsultations can be a useful tool for addressing this issue."

Teladoc may not be the only voice in virtual care, but it is by far the most powerful. The company's ability to diversify its offerings to patients and providers -- as evidenced by its acquisitions of telehealth company InTouch Health and chronic care platform Livongo last year -- and broaden accessibility to the best in full-service virtual care have made it the world's leading provider of telemedicine services. I think that Teladoc is a gold mine for long-term investors. If you're seeking a premium company to provide meaningful portfolio growth, don't hesitate to scoop up shares of this unbeatable healthcare stock

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Stocks Mentioned

Zoom Video Communications Stock Quote
Zoom Video Communications
$89.74 (-1.32%) $-1.20
Teladoc Health, Inc. Stock Quote
Teladoc Health, Inc.
$32.74 (-0.52%) $0.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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