The e-commerce trend was already growing at a strong clip even before the COVID-19 pandemic accelerated it. With most Americans attempting to reduce their risks of contracting or spreading the coronavirus, they took much of their shopping online.

Many businesses that once saw e-commerce as their enemy now see it as their biggest growth driver. Three companies making this transition possible are Shopify (NYSE:SHOP), FedEx (NYSE:FDX), and Honeywell (NASDAQ:HON). And each of their stocks is still a great buy.

A business man talking on the phone and working on his laptop from home.

Image source: Getty Images.

1. Shopify

Few companies embody e-commerce more than Shopify. Its digital storefronts help merchants of all sizes take their businesses online, something that vast numbers of them found themselves compelled to do during the pandemic.

Shopify's revenue comes from two sources: subscription solutions and merchant solutions. Subscription solutions are fairly self-explanatory. Shopify's clients pay various tiers of monthly subscriptions to use its services. The merchant solutions category includes an array of tools and services beyond those that are included in a monthly subscription. Clients pay for these based on how heavily they use them. Services like shipping labels and tracking, as well as financing and payment processing, earn Shopify more money and encourage customers to renew their subscriptions.

Both segments of the business are incredibly profitable. In 2020, subscription revenue accounted for 31% of revenue and had a gross margin of 79%. Merchant solutions revenue made up the other 69% and had a gross margin of 41%. These numbers can be a bit misleading, given that gaining access to Shopify's merchant solutions is a big reason why many businesses join up on the subscription side in the first place.

Shopify is an expensive tech stock, with a price-to-sales ratio of 46. However, its growth rate has been truly incredible. Last year, revenue grew by 86%, with subscription revenue growing by 41% and merchant solutions revenue growing by 116%. Management expects growth to slow down in 2021, but the long-term future looks bright. 

SHOP Total Return Level Chart

SHOP Total Return Level data by YCharts

2. FedEx

Shares of package delivery giant FedEx gained 6% on March 19 after the company delivered earnings for its fiscal third quarter  that handily beat estimates. FedEx earned $21.5 billion in revenue in the quarter, which ended on Feb. 28. That not only made it a record holiday quarter, but the highest quarterly revenue in its history. What's also encouraging is the company's business-to-business (B2B) volumes, which had declined substantially early in the pandemic, have since improved back to 2019 levels due to vaccine shipments, retail, and tech. Automotive and industrial B2B volumes are still down. 

FDX Revenue (Quarterly) Chart

FDX Revenue (Quarterly) data by YCharts

Over the past year, FedEx and rival United Parcel Service have benefited from the growth in residential deliveries. E-commerce has played a key role in that, and both companies believe e-commerce growth is here to stay. During the fiscal Q3 conference call, FedEx Chief Marketing and Communications Officer Brie Carere said: 

The U.S. domestic parcel market is expected to grow to 101 million packages a day by calendar year 2022, with e-commerce contributing 86% of total U.S. market growth. E-commerce as a percentage of U.S. retail sales was approximately 21% in Q4 of calendar year 2020, significantly above the pre-pandemic level. 

The ideal scenario for FedEx would be a rebound in B2B volumes, permanent changes in consumer behavior that favor FedEx Express and Ground deliveries, and long-term growth in e-commerce.

3. Honeywell

Like most industrial stocks, Honeywell's performance tanked in 2020's second quarter, but largely recovered by the end of the year. The company's 2021 guidance suggests higher revenue, EPS, and free cash flow than 2020, but not by much. In fact, all three metrics are forecast to be lower than its 2019 and 2018 results.

Wall Street isn't focused on Honeywell's 2020 or 2021 results, but rather on the anticipated rebound in the commercial aerospace sector and the growth potential of the Industrial Internet of Things (IIoT). In the past, industrial companies scaled through efficiency improvements and globalization. While this is still true, Honeywell sees a bright future in connecting industrial assets and making them run better using technology.

This is what IIoT is all about, and Honeywell believes it will have a $100 billion total addressable market in this space. The scope extends to all of its business segments, but its safety and productivity solutions unit is garnering most of the attention right now. That was the only segment that grew in 2020, largely thanks to increased demand for pandemic-related safety products and an uptick in warehouse automation. 

Warehouse workers managing inventory.

Image source: Getty Images.

As e-commerce grows, so does the need for warehouse safety and automation products such as those Honeywell offers. Companies whose distribution centers can keep their supply chains organized, correctly fill orders, and deliver packages faster gain an edge over their competition. 

Honeywell's Momentum warehouse execution system is a software solution that helps distribution centers function more efficiently. It uses machine learning algorithms and optimization techniques to generate what the company calls "decision intelligence" -- essentially, insights that can make distribution centers safer and more efficient.

Unlike Shopify or FedEx, Honeywell is a diversified industrial conglomerate with a host of business segments, which makes it a safer but less direct way to invest in the e-commerce trend. And at current share prices, Honeywell offers a dividend yield of 1.7%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.