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3 Top Growth Stocks I'd Buy Right Now Without Any Hesitation

By Keith Speights – Aug 6, 2021 at 5:52AM

Key Points

  • One company reported slowing growth, but recent acquisitions make its future brighter than ever.
  • Another continues to deliver impressive sales and earnings momentum and pays an attractive dividend.
  • The third company has multiple businesses -- and all of them are going strong.

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Their long-term prospects remain rock solid.

Here's one thing we can all be certain about: There's plenty of uncertainty in the stock market right now. Valuations are at sky-high levels, and the delta variant is causing COVID-19 cases to soar. 

This uncertainty could cause many investors to be skittish about buying stocks, and such reluctance could be warranted for some equities. However, here are three top growth stocks I'd buy right now without any hesitation.

Three lines with arrows and dollar signs against a blue background

Image source: Getty Images.

Etsy

You might be surprised that I rank Etsy (ETSY 0.79%) high on the list. Etsy's shares plunged on Thursday after the online craft-goods company reported slowing growth in its second-quarter update. But I view this sell-off as a great buying opportunity.

Etsy CEO Josh Silverman acknowledged in the company's Q2 conference call that the addition of 8 million new buyers is lower than what Etsy added in the previous few quarters. However, he noted that this number is nearly double the new buyers added per quarter before the pandemic.

I think that any expectations investors might have had that Etsy would be able to sustain its COVID-19-fueled growth rates were unrealistic. Despite the inevitable slowing of growth, Etsy's future is arguably brighter than ever with the recent acquisitions of fashion reseller Depop and Brazilian online handmade-products marketplace Elo7.

The company is going after a total addressable market of $1.7 trillion. With its market cap currently below $25 billion, Etsy only has to capture a sliver of that market to deliver strong long-term growth. I believe it's still in great shape to achieve that goal.

Innovative Industrial Properties

Few would complain about Innovative Industrial Properties' (IIPR -1.09%) Q2 growth. The cannabis-focused real estate investment trust (REIT) reported on Wednesday that its Q2 revenue more than doubled year over year, with earnings soaring 124%.

What I most like about IIP is that it has a simple formula to keep up those winning ways. The company merely needs to keep doing what it's been doing: Buying properties from medical-cannabis operators, then leasing those properties back to them.

IIP currently owns 73 properties in 18 states. The medical-cannabis markets in many of these states continue to grow, giving the company opportunities to pick up new properties. There are also another 18 states where medical cannabis is legal in which IIP doesn't operate yet.

In addition to its great growth prospects, IIP also offers an attractive dividend, with a yield of nearly 2.6%. The company has quadrupled its dividend payout over the last three years.

MercadoLibre

MercadoLibre (MELI 0.43%) is another top growth stock that delivered sizzling growth in the second quarter. Net revenue more than doubled year over year. Earnings jumped 22% -- well below revenue growth, in large part because of the Latin American e-commerce company's investments in expanding its business.

Like Etsy, MercadoLibre has seen its growth rate slow somewhat with tougher prior-year comparisons, due to the pandemic. Also like Etsy, though, the company looks to be in a strong position going forward.

All of MercadoLibre's businesses are humming along nicely. E-commerce, digital payments, shipping, asset management, and other units generated impressive growth in Q2.

I think that the Latin American market will continue to expand, and MercadoLibre's ecosystem should grow in tandem. The company will face increased competition, but my take is that it's up to the challenge. 

Keith Speights owns shares of Etsy, Innovative Industrial Properties, and MercadoLibre. The Motley Fool owns shares of and recommends Etsy, Innovative Industrial Properties, and MercadoLibre. The Motley Fool has a disclosure policy.

Stocks Mentioned

MercadoLibre Stock Quote
MercadoLibre
MELI
$945.07 (0.43%) $4.06
Etsy Stock Quote
Etsy
ETSY
$140.49 (0.79%) $1.10
Innovative Industrial Properties Stock Quote
Innovative Industrial Properties
IIPR
$118.68 (-1.09%) $-1.31

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

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