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2 Stock Picks for 2021

By Brian Withers and Jason Hall - Mar 2, 2021 at 7:46AM

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One dividend play and a growth stock.

After the topsy-turvy year that was 2020, where should investors look in 2021 to find great stocks? On this clip from Motley Fool Live, recorded on Jan. 19, Fool.com contributor Brian Withers discusses his favorite dividend stock and top growth stock for 2021. Jason Hall wraps up with some key facts investors should know about the well-known dividend-paying retailer.

Brian Withers: Well, like Dylan, I am not a seeker of dividend stocks. But I wrote about Home Depot (HD 0.91%) as one of my favorites and the title of the article was "This Dividend Stock Has Something for Just About Every Investor." It's paid a rising dividend only 11 years in a row. So it's not quite the Dividend Aristocrat yet.

But behind the scenes, it's investing in tech like crazy. We talked a little bit about the omnichannel -- that's complex from a tech perspective, especially with legacy infrastructure that was built in the late '80s, early '90s. Then it's also playing multiple trends. The work-from-home trend, how can we get more out of the space that we live in? E-commerce and aging housing in the United States is becoming a big deal. So great business, fantastic management, [a] dividend, and certainly a growth theme over time.

For my growth stock, it's Twilio (TWLO 4.31%). I wrote [about] it as my cloud computing stock for 2021. It's grown a ton, but it still has plenty of levers to grow and it's expanding its total addressable market with some key acquisitions. Most recently with Segment.IO into the customer data platform space and it hasn't even monetized anything there yet. So look for this company to be a long-term winner over the next five or 10 years.

Jason Hall: Two data points on Home Depot, I think are worth mentioning. [The] average existing home in the U.S. is 37 years old. That's old, right? That means a lot of them were also built in the late '70s and early '80s when homebuilders were building really crappy homes. Home Depot also has great relationships with local contractors. I think a lot of people sleep on that. I think it's a huge source of potential growth because of those things Brian was talking about.

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Stocks Mentioned

The Home Depot, Inc. Stock Quote
The Home Depot, Inc.
HD
$287.76 (0.91%) $2.58
Twilio Inc. Stock Quote
Twilio Inc.
TWLO
$101.82 (4.31%) $4.21

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