The stock market has been a flurry of contradictions lately, marking daily record highs followed by days of sharp decline. During times of volatility, it's important to remember that the stock market moves in cycles, and a few good or bad days shouldn't influence your investment decisions.

As the economy crawls toward recovery, the market will continue to have its up and down days. If you want to prime your portfolio for sustainable growth both during this period of recovery and in the years to come, here are two shrewd investments to add to your list of top stocks to buy.

Woman standing in field of marijuana plants holding marijuana leaf

Image source: Getty Images.

1. Innovative Industrial Properties

If you like the idea of buying marijuana stocks but don't particularly favor the risk and volatility that come with these investments, there's no need to throw in the towel on this industry just yet. Innovative Industrial Properties (IIPR -0.64%) is by far one of the most profitable pot stocks trading on the market today. The primary reason Innovative Industrial Properties is such a stark contrast to your more run-of-the-mill marijuana stocks is that it operates as a real estate investment trust (REIT) rather than as a pure-play pot grower.

With a portfolio of properties focused exclusively on medical-use marijuana facilities, the REIT has homed in on the profitable (and far more widely legalized) sector of the cannabis market. Over the past 12 months, shares of Innovative Industrial Properties have soared by roughly 105% as the company has continued to grow its profits and bolster its balance sheet despite the struggling economy.

In 2020, Innovative Industrial Properties grew its total revenues by a mouth-watering 162%. At the same time, its bottom line jumped even higher, with year-over-year growth of 191%. The REIT also made significant additions to its portfolio last year, "including 20 new property acquisitions, expanding IIP's footprint to 66 properties totaling 5.4 million rentable square feet in 17 states at year-end."

Besides Innovative Industrial Properties' stellar top- and bottom-line growth, another huge point in its favor is the fact that the company doesn't carry any short-term debt. The REIT holds about $745 million in cash, cash equivalents, and short-term investments, as opposed to roughly $144 million secured debt in the form of exchangeable senior notes set to mature in 2024. So liquidity definitely isn't an issue with this marijuana stock.

Another reason to love Innovative Industrial Properties is its dividend. Yielding 2.5% based on current share prices, its dividend outshines that of the average stock trading on the S&P 500. The company also boosted its dividend by roughly 6% in December, so long-term investors could see their payouts increase substantially over the next decade or longer.

2. PayPal

As the digital payments market continues to expand to behemoth proportions spurred on by the electronic age we live in, companies like PayPal (PYPL -0.93%) are growing in kind. PayPal controls a significant share of the global online payments market, a sector that achieved a $58 billion valuation last year and is on track to realize a compound annual growth rate of nearly 20% over the next seven years, according to Grand View Research.

When the market tanked last March, shares of PayPal only shot up higher. Over the trailing 12 months, the stock has soared 150%. PayPal's stock price isn't the only area where the company has seen unprecedented levels of growth -- its broken its own financials records throughout the pandemic.

In 2020, PayPal grew its total payment volume 31% and its net revenues surged 22% year over year. The company's earnings per share (EPS) also spiked in 2020, delivering total year-over-year growth of 71%. PayPal also added more than 72 million net new active accounts (NNAs) to its platform over the 12-month period, a 95% uptick from the 37 million NNAs it acquired in the whole of 2019. 

CEO Dan Schulman stated the following about PayPal's banner year:

PayPal delivered record performance in 2020 as businesses of all sizes have digitized in the wake of the pandemic. In this historic year, we released more products than ever before and have dramatically scaled our acceptance worldwide, giving our 377 million consumer and merchant accounts even more reasons to use our platform. 

Management is also expecting notable platform growth in 2021, projecting that total payment volume alone will surge by double digits. Meanwhile, analysts think that the company can boost its earnings by roughly 22% each year in the next five years.

As PayPal continues to expand its platform, its customer base, and its balance sheet, the company's stock price should also achieve meaningful increases, although perhaps not at quite the same speed investors saw in 2020. PayPal's track record of diversification and growth, as well as the value of its platform to businesses and individuals around the world in a time of growing digitization, make this rock-star stock an incomparable buy for the long-term investor.