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3 Stocks for the 2020s

By Sam Swenson, CFA, CPA - Mar 28, 2021 at 6:15AM

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The next decade is poised to be one of the most influential in history.

With the COVID-19 pandemic mercifully crawling into a muted phase, it's now a better time than ever to think about the companies best positioned to succeed in the coming decade. We've no doubt changed the way in which we live, work, relax, and care for each other, but it will be interesting to see which, if any, of our behaviors from the last year manage to stick for the long haul. Here, we'll look at three companies destined for sustained growth in the coming decade.

Doctor waving at laptop screen

Image source: Getty Images.

1. Teladoc

At first, there was reason for skepticism: How could anyone have a meaningful interaction with a doctor in a Zoom-like environment? The reality is, however, that virtual physician visits are incredibly efficient and time-saving for both patient and provider. Teladoc Health (TDOC 0.85%) truly provides a great solution for those looking to find answers to non-urgent medical questions -- all without a treacherous commute, crowded public transit, and the traditional waiting room experience. 

Teladoc expects revenue to grow 100% in 2021, and it's very easy to see why: Visits for non-emergent reasons, like high blood pressure or ongoing depression, can now be handled virtually without the feeling that something has been lost. Furthermore, virtual visits limit exposure between patient, doctors, and staff -- unquestionably a positive after the events of the past 12 months. What's perhaps most intriguing is that Teladoc's revenue is largely (about 80%) driven by recurring subscriptions, key to a reliable business model.

2. Lyft

On the theme of changing the way we go about our lives, Lyft (LYFT 5.35%) is an interesting play not only from the world of ride-sharing but also with regard to autonomous driving and other modes of transportation (think scooters and bikes). This speaks to the relatively new idea of "Mobility-as-a-Service," or "MaaS." One has to believe that these ideas will revolutionize city transportation, and Lyft is supremely positioned to head the pack of pure-play ride-sharing companies.

Lyft sells the idea of access as opposed to ownership. This is especially popular with city-dwelling millennials and members of Gen Z --  most of whom find car ownership to be an expensive burden. There is simply something about an all-electric fleet of shared rides that is inherently appealing to most young people, as they're eco-friendly and lifestyle-efficient. After posting a $1.75 billion net loss in 2020, the company has a great chance to roar back in 2021, posting guidance that it could show strong growth in the second half of the coming year.

3. Abbott Laboratories

As one of the leading medical device companies, Abbott Laboratories (ABT 1.31%) has made headlines over the past year for its work surrounding COVID-19 testing. The company added revenue growth in 2020, boosting sales by about 8.5% from 2019. Given its strong balance sheet and a growing bottom line (earnings were up to $4.5 billion in 2020 from $3.69 billion in 2019 and $2.37 billion in 2018), there is ample reason to expect Abbott Labs will continue its stellar performance in the diagnostic and pharmaceutical fields.

Abbott's outlook in the 2020s is as strong as ever, primarily because it has proven its ability to deliver in the past. Abbott Labs has increased its dividend every year by an average of 10% for nearly 50 years. Secondarily, Abbott is well positioned to address a major global issue before it even exists: the next pandemic. Abbott is at the forefront of public health crisis preparedness, which stands to be a major market in and of itself for the next several decades. 

The future is always uncertain

While we can't ever predict the future with certainty, there is reason to believe that the above three companies will continue to perform well into the 2020s. The hope is that with a thorough examination of the ways in which our lives have changed forever, we can pick the companies that stand to benefit. Before investing in any single stocks, however, it's advisable to evaluate your risk tolerance and time horizon appropriately, so take care to evaluate your entire financial picture before engaging in any financial moves you may regret. 


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Stocks Mentioned

Teladoc Health, Inc. Stock Quote
Teladoc Health, Inc.
$33.02 (0.85%) $0.28
Abbott Laboratories Stock Quote
Abbott Laboratories
$114.72 (1.31%) $1.48
Lyft, Inc. Stock Quote
Lyft, Inc.
$20.09 (5.35%) $1.02

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

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