There are no guarantees when it comes to investing in stocks, but a forward-thinking perspective coupled with a core portfolio of solid businesses can help you to weather the market's storms and generate worthwhile long-term returns.
If you have $1,000 to invest in the stock market this month, here are three unstoppable stocks to put at the top of your buy list.
Image source: Getty Images
1. Teladoc
The number of people turning to telehealth solutions soared to an all-time high during the pandemic, and the world's largest business in that niche, Teladoc Health (TDOC -3.10%) clearly benefited. However, the global telehealth market is expected to continue growing at a remarkable rate -- even in the post-pandemic world. A report released by The Business Research Company this month forecast a compound annual growth rate (CAGR) of approximately 31% between 2020 and 2025 for the global telehealth market, followed by a CAGR of 10% between 2025 and 2030.
Teladoc closed out 2020 with 145% year-over-year revenue growth in the fourth quarter and 98% revenue growth for the full year. Platform visits surged 156% in 2020, while in the final quarter, Teladoc saw a 139% spike in users compared to the prior-year period.
Management is guiding for revenue in the range of $1.95 billion to $2 billion for 2021, up from the approximately $1.1 billion in revenue it reported for 2020. The company also expects to build on its strong track record of platform growth, forecasting between 12 million and 13 million total visits on its platform for 2021. That would be a notable increase from the 10.6 million total visits completed on its platform in 2020.
Shares of Teladoc have skyrocketed by approximately 1,440% over the past five years, and the wave of investor enthusiasm for the company during the pandemic repeatedly drove shares to new highs. Given the growth trajectory ahead for the broader telehealth industry and Teladoc's prominent place within it, the stock could potentially rise much further over the next few years as the company continues its rapid expansion.
2. Costco
Many retail companies and their stocks were hit hard during the pandemic, but there were notable exceptions. Costco (COST -0.41%) was one of them. The fact that its hundreds of warehouse stores maintained their "essential business" status throughout the crisis, coupled with consistent demand for its products and its robust global e-commerce presence, were key reasons that the retailer continued to flourish and maintained stellar balance sheet growth.
In Costco's fiscal year 2020 (which ended Aug. 30), its net sales grew 9%, and its net income rose by approximately the same percentage. Comparable sales bumped up by 8%, while a global surge in online shopping sent e-commerce sales upward by 50%.
Costco has already reported financial results for the first two quarters of its fiscal 2021, both of which have reflected continued high growth for the company on all fronts. In its fiscal Q1 (which ended Nov. 22), net sales surged 17% year over year while comparable sales and e-commerce sales surged by 15% and 86%, respectively. And in its fiscal Q2, (which ended Feb. 14), the company's net sales, comparable sales, and e-commerce sales shot up 15%, 13%, and 76%, respectively. Costco also reported bottom-line growth in both quarters.
Costco's ability to generate consistent top and bottom-line increases makes the company a particularly attractive buy in today's volatile market environment. But there's another reason for long-term investors to like this stock: its dividend. At current share prices, the payout yields under 1%, but management has a reliable track record of increasing it regularly. On April 14, the company announced that it was boosting its quarterly dividend from $0.70 to $0.79 per share, a hike of approximately 13%.
Costco isn't the type of stock that will make investors rich overnight. However, it has proven a highly resilient long-term investment and a valuable play for dividend investors.
3. Target
Target (TGT -0.59%) is another top retail stock that has built on its "essential business" status throughout the pandemic. The stock is also a compelling buy for investors seeking dividend income. Target's dividend currently yields 1.3%, just below the yield of the average S&P 500 stock.
The most impressive aspect of Target's dividend is its history of raising its payouts. Not only does the company qualify as a Dividend Aristocrat with a streak of increases exceeding 25 straight years, it's actually just a couple of hikes shy of being crowned a Dividend King, which requires an annual dividend boost for 50 years straight.
2020 was a remarkable year for Target. It reported $92 billion in total sales, a 20% increase from 2019. Comparable sales surged by a similar rate (19%) while operating income rose 40%. Digital sales were also a huge source of balance sheet growth, jumping by roughly $10 billion compared to 2019.
Target's exceptional top-line growth in 2020 also enabled it to effect a significant expansion of its market share. As CEO Brian Cornell noted in the full-year report, "we gained nearly $9 billion in market share in 2020, and grew our revenue by $15 billion, which is more than the 11 prior years combined."
Management intends to capitalize on the company's remarkable gains in 2020 to further expand its retail platform. To that end, Target announced on March 2 that it would be investing $4 billion annually in the years ahead on things like opening new retail locations and expanding fulfillment options for customers.
While some retailers have struggled to meet the demands of consumers who are increasingly searching for convenient and fast solutions for a variety of shopping needs, Target is proving that it is more than up to the task in both digital as well as traditional brick-and-mortar environments. Not only does this bode well for Target's ongoing growth story, but it's also great news for investors seeking a safe stock to add value, growth, and dividends to their portfolio for years to come.
