The market has kept investors on their toes over the past 12 months, as it marked record lows in March 2020 followed by a sharp recovery to reach record highs. And since the start of 2021, new rounds of stimulus money and ongoing vaccination efforts have fueled numerous record-setting days and revealed growing investor confidence in the future. On Mon., March 29, the Dow Jones Industrial Average closed at a new all-time high of 33,171. The previous Friday, the S&P 500 had also clocked a new record high, closing at 3,975.
If you're searching for stocks with unstoppable growth potential for a Biden bull market, you've come to the right place. Let's dive into three companies in three very different sectors that investors just can't get enough of in 2021.
Image source: Getty Images
1. Alphabet
Alphabet (GOOGL -1.97%) (GOOG -1.96%) is the parent company of Google and part of the group of stocks called FAANG. The company has kept up its stellar track record of strong financial performance throughout the economic turmoil of the past year.
Alphabet derives its revenue from two primary segments -- its Google business and "other bets." The Google segment encompasses revenue sources such as Google Search and Google Cloud, while other bets covers a range of lesser-known subsidiaries such as San Francisco-headquartered biotech, Calico LLC. Alphabet's diverse portfolio of products, services, and subsidiaries continues to fuel its compelling growth year after year while opening new gateways to expand both its top and its bottom line.
Despite Alphabet reporting its first-ever revenue drop in the second quarter of 2020, it closed out the full year on a high note. During the fourth quarter, the company grew its total revenues by 23% from the year-ago period. Looking at Alphabet's full-year performance, the company grew its revenues 13% from 2019 while its net income surged 17%. Google Services (which includes Google Search and YouTube Ads) and Google Cloud continue to be Alphabet's primary sources of growth. These divisions reported respective revenue increases of roughly 11% and 46% in 2020.
Analysts project that Alphabet can consistently increase its average annual earnings by approximately 17% over the next five years alone. This is no surprise, given that Alphabet's business model is one primed to meet the demands and growth standards of an increasingly digitized society. With business divisions that lead in the fields of internet search, online advertising, cloud computing, and streaming, while extending to far-flung sectors ranging from autonomous driving to the life sciences, it's safe to say that Alphabet's growth story can continue to be written in the coming decades.
2. Teladoc
Shares of Teladoc Health (TDOC -2.91%) were on a wild ride last year, skyrocketing about 160% in the first half of 2020 alone. The stock has retracted close to its trading price one year ago, but I don't think this shouldn't worry investors.
First of all, a drop in Teladoc's shares was to be expected at some point. At the height of the pandemic, stay-at-home stocks quickly became some of the hottest buys on the market. Now, as the world slowly returns to normalcy, shares of some of these stocks have fallen from pandemic highs. But just because Teladoc is trading at a more reasonable price than it was several months ago doesn't make it any less of a great buy.
Teladoc is one of the largest telemedicine companies in the world. At the time of this writing, it has amassed a market cap just north of $27 billion. Furthermore, digital healthcare became the go-to for millions during the pandemic, and these trends will continue to play an integral role in the future of medicine. In fact, a recent report by Research and Markets projects that the global digital health market will clock a market valuation of nearly $500 billion by the year 2025 -- sporting a compound annual growth rate (CAGR) of approximately 25%.
Teladoc reported 98% year-over-year revenue growth in 2020, along with a 156% increase in visits conducted on its platform. Management is also projecting above-average balance sheet and member growth in 2021. This year, the company is forecasting approximately 83% revenue growth and up to a 23% boost in total platform visits. As the world transitions to a post-pandemic reality, Teladoc's leadership in the rapidly expanding telemedicine field make this company a lucrative, high-growth play for any shrewd investor's basket of stocks.
3. Upwork
Another sector that is poised to see exponential growth over the next five to 10 years is the freelance economy. Freelancers are increasingly becoming an integral part of the global workforce, and platforms like Upwork (UPWK -1.58%) that connect providers of these indispensable services to clients around the world are the backbone of this flourishing market.
In a 2019 study that Upwork conducted with the Freelancers Union, the company reported that "freelance income contributes more to the economy than industries such as construction and transportation and is on par with the information sector." At the time of the study, freelancers constituted roughly one-third of the U.S. labor force, with freelance income comprising approximately 5% of this country's gross domestic product (GDP) that year alone.
Investors are increasingly recognizing the value and growth potential the freelance platform has to offer both its users and its shareholders during the pandemic era as well as in post-pandemic world. Case in point: Shares of Upwork have jumped by about 660% over the past year alone.
Upwork grew its total revenues 24% in 2020, and management is forecasting up to 26% revenue growth for 2021. Double-digit top-line growth isn't anything new for Upwork. The company reported a 25% revenue increase in 2018, followed by a 19% boost in revenue in 2019.
If anything, Upwork's 2020 financial performance was simply a continuation of its illustrious growth saga. Investors can expect great things from Upwork in the years to come, and now looks like a better time than ever to scoop up shares of this hot growth stock.
