Please ensure Javascript is enabled for purposes of website accessibility

Forget Dogecoin: These Tech Stocks Are Better Buys Right Now

By Anders Bylund - May 4, 2021 at 7:47AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

These tech stocks are much safer investments than the dog-themed digital currency, and they're also exciting opportunities in their own right.

Cryptocurrencies have generated lots of headlines recently. These digital assets don't have business plans and don't generate cash profits like regular businesses aim to do, which makes it impossible to find a fair value for them. But it doesn't take much of a news item to drive some cryptocurrencies much higher in a hurry. The meme-themed cryptocurrency Dogecoin (DOGE -4.20%), for example, has surged nearly a hundredfold in 2021, from less than half a penny to roughly $0.42 per token.

Many Dogecoin owners see the token as an easy way to get rich quickly. That's more like gambling than investing, especially since Dogecoin comes with some unique market risks. In particular, sector leader Bitcoin (BTC -5.13%) will never have more than 21 million tokens on the market, and runner-up Ethereum (ETH -9.85%) caps its annual generation at 18 million tokens. Dogecoin has no such limits, with a circulating supply of 129 billion tokens today.

It's not surprising that younger people, in particular, are attracted to cryptocurrencies. They view digital assets as a way to get rich quickly, which is really nothing more than gambling. This could end badly for carefree speculators, given the volatile and unpredictable nature of even the largest and most serious cryptocurrencies.

You can do better. Over the long term, the stock market has been an excellent tool for building sustainable wealth. Forget the silly meme cryptocurrency Dogecoin and take a good, hard look at these promising high-growth companies. They can make you rich over time, just like cryptocurrencies, and you'll lose less sleep over the stocks.

An aging analyst gives his client a stern look.

Trust me, you don't want to invest your life savings in Dogecoin. Image source: Getty Images.

Back to the Dolby lab again

I'm sure you know the name Dolby Labs (DLB -0.63%). This company has been a leader in audio and video technologies for decades and that legacy continues today. Large volumes of consumer electronics such as TV sets, set-top boxes, and video game consoles are shipping with support for Dolby Atmos and Dolby Vision technologies. Every unit of these shipments translates into royalty payments to Dolby Labs.

The COVID-19 pandemic has been both good and bad for Dolby. The company's portfolio of technologies and equipment for cinematic experiences suffered minuscule orders due to lockdowns and a lack of studio support for new silver-screen titles. At the same time, home entertainment shipments surged in 2020 and especially over the holidays.

The rising interest in premium-quality media is visible in Dolby's financial results. First-quarter sales increased 34% year over year, landing at $390 million. Adjusted earnings rose from $0.64 to $1.48 per share. Your average analyst would have settled for earnings near $1.04 per share on sales in the neighborhood of $345 million.

As Dolby expands its technology solutions and grows its addressable markets, one device at a time, I would much rather own this stock than a bucket of Dogecoin tokens.

A smiling businesswoman at her laptop is surrounded by hundred-dollar bills swirling in the air.

Image source: Getty Images.

Give me a ring

RingCentral (RNG -2.35%) is a leader in the market for Unified-Communications-as-a-Service, providing cloud-based voice and video communication solutions to companies of every size and stripe. RingCentral's business fortunes got a serious tailwind from the pandemic's work-from-home policies and hope to convert this temporary advantage into a long-lasting growth trend.

"Our technology moat, combined with a differentiated distribution moat with our unique partnerships, positions us for long-term durable growth," said CFO Mitesh Dhruv on February's fourth-quarter earnings call. "We are confident in our ability to thrive in this $50 billion-plus addressable market, and we believe 2021 could be a very exciting year ahead for RingCentral."

Let me explain how large the growth opportunity is. As Dhruv said, the UCaaS sector generates sales north of $50 billion per year. RingCentral's slice of that revenue pie was just $1.2 billion last year. As the company fights to capture a larger share, the market itself should grow for years to come. Cloud-based voice and video calls are here to stay and we're talking about a renowned provider of top-shelf technologies for these services.

That's another technology stock that looks like a better investment than that risky Dogecoin cryptocurrency.





Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

RingCentral, Inc. Stock Quote
RingCentral, Inc.
RNG
$55.39 (-2.35%) $-1.33
Dolby Laboratories, Inc. Stock Quote
Dolby Laboratories, Inc.
DLB
$72.69 (-0.63%) $0.46
Bitcoin Stock Quote
Bitcoin
BTC
$19,074.43 (-5.13%) $-1,031.11
Dogecoin Stock Quote
Dogecoin
DOGE
$0.06 (-4.20%) $0.00
Ethereum Stock Quote
Ethereum
ETH
$1,016.98 (-9.85%) $-111.10

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
319%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.