Throughout the pandemic, consumers have been saving more money. According to the U.S. Commerce Department, people held on to 16.4% of their disposable income in 2020, more than double the 7.5% savings rate in 2019. And that figure actually ticked up to 21.5% in the first quarter of this year.

That means many consumers may have a little extra cash to burn, which could be a significant growth driver for the economy. And in the event of a post-pandemic bull market, companies like Paycom Software (NYSE:PAYC) and Square (NYSE:SQ) are well positioned to benefit. Here's why.

Paycom Software

Paycom helps clients manage their workforce more efficiently. Its human capital management (HCM) platform includes tools for talent acquisition, time and labor, payroll, and human resources, and it provides access to real-time analytics.

Toy bull placed beside stock market charts.

Image source: Getty Images.

Today, many companies rely on a patchwork of software to meet their HCM needs, but the Paycom platform is an end-to-end solution, designed to simplify all stages of the employee lifecycle, from recruitment to retirement.

Moreover, Paycom's products are built on a single database. This differs from the patchwork approach, which typically requires clients to maintain multiple databases, burdening administrators with time-consuming and tedious work. That advantage has been a powerful growth driver for Paycom.


Q1 2018 (TTM)

Q1 2021 (TTM)



$467.5 million

$871.2 million


Free cash flow

$78.5 million

$140.9 million


Data source: Ycharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

Notably, customer-centricity is a key part of Paycom's growth strategy. A dedicated service professional is assigned to work with each client, giving them access to personalized customer support. That one-on-one attention helped Paycom retain 93% of its clients in 2020, despite the challenges posed by the pandemic.

Looking ahead, the company plans to expand its sales force, which currently has a presence in 38 of the top 50 U.S. metropolitan areas. This move should help Paycom onboard new clients, particularly in markets where it's currently unrepresented. And given the company's customer-centric business model, I think this could be a real growth driver.

As a final thought, part of Paycom's revenue depends on the number of employees using its products. In other words, the company wins when its clients' workforces get bigger, which may very well happen in the event of a post-pandemic bull market. That's why now looks like a good time to buy this growth stock.


Square democratizes commerce, providing sellers with the tools they need to start, manage, and grow their business, in both the physical and digital worlds. More importantly, its platform is an end-to-end solution, inclusive of hardware, software, and services. In other words, Square helps clients with everything from payment processing and inventory to payroll and customer loyalty.

Barista at a coffee shop using Square hardware.

Image source: Square.

Notably, Square's strategy differs from traditional options, which typically require sellers to stitch together multiple systems. Not surprisingly, this simplified approach has helped Square win clients across industries, from retail to healthcare. Moreover, despite initial success with small businesses, it's now also gaining traction with mid-market merchants (i.e., those with more than $500,000 in annual sales).

Specifically, Square's custom point-of-sale software -- designed for retailers and restaurateurs -- has helped bring larger sellers to its platform. In fact, gross payment volume (GPV) from these mid-market clients surged 43% in the first quarter, growing more than twice as fast as total GPV. That helped drive gross profit of $486 million in the Seller ecosystem, up 32% over the prior year.

But the Seller ecosystem is only half of Square's business. Its Cash App -- a financial tool that allows consumers to spend, send, and invest money -- also delivered impressive results in Q1. Most notably, spend on the Square Cash Card surged over 150%, and the number of monthly Cash Card users reached 10 million. That strong adoption powered Cash App gross profit of $495 million, up 171% from the prior year.

This two-sided dynamic is one of Square's greatest assets. The Seller and Cash App ecosystems are complementary, helping the company draw both merchants and consumers onto its platform. In the event of a post-pandemic boom, increased consumer spending would likely drive strong results in both of Square's product ecosystems. That's why investors should consider adding this growth stock to their portfolios.

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.