Whether it's higher inflation, the Federal Reserve's next move, or the recovery from the pandemic, investors are faced with more questions today than they might have answers for. An effective way to deal with this uncertainty is simply to own high-quality businesses that can weather whatever is thrown their way. This also saves shareholders the headache of constantly following the never-ending financial news cycle.
With that being said, if these concerns result in a market sell-off, look no further than the following four stock market winners. A $1,000 investment can afford you at least one share of each company.
Image source: Getty Images.
1. Your local, but global, shop next door
As a leading online marketplace for handmade and vintage goods, Etsy (ETSY -0.46%) benefits from growing consumer interest in e-commerce and supporting small businesses. The company was flourishing even before the pandemic surge last year. And in the most recent quarter, Etsy's 5.2 million active sellers and 90.5 million active buyers generated gross merchandise sales (GMS) of more than $3 billion.
Etsy's network effects make it extremely difficult for any rival to compete, and as more users join the platform, it becomes increasingly more valuable to everyone else. The business currently focuses on seven key geographies, namely the U.S., U.K., Canada, Germany, Australia, France, and India. Management believes that these countries present Etsy with a massive addressable market with an annual revenue opportunity of $1.7 trillion.
With the recent acquisitions of Depop (global fashion reseller) and Elo7 (Brazilian handmade goods marketplace), Etsy is building what CEO Josh Silverman calls a "House of Brands." Expect Etsy's impressive success to continue for a long time.
2. Riding the hot housing market
The largest home-improvement business on the planet, Home Depot (HD 0.22%), is certainly influenced by what happens in the housing market. Still, historically low interest rates, coupled with tight housing supply, have provided a nice tailwind for this Atlanta-based retailer. But let me be clear, this is a company that tends to excel no matter what the economic situation is.
Home Depot's sales grew 8.1% in the most recent quarter, but this was compared to a remarkable pace of greater than 20% revenue increases in each of the prior four quarters. Stuck at home during the pandemic with more spare time than usual, consumers focused on completing renovation projects. And while the do-it-yourself customers propelled Home Depot last year, it's the professional customer (or Pro) that is seeing accelerated gains recently.
This behemoth $342 billion company also sports stellar margins and returns on invested capital, demonstrating its ability to lean on significant supply chain investments made over the years to boost store productivity. A forward price-to-earnings ratio of 22 makes this stock a no-brainer.
Image source: Getty Images.
3. Making chiropractic care more accessible
In the U.S., an estimated $90 billion is spent on back pain treatments every year. And of this, $18 billion goes toward chiropractic care. But there's just one issue -- 50% of Americans don't even know what the word "chiropractic" means. Luckily, with its 633 total clinics around the country, The Joint Corp. (JYNT 1.48%) is here to change that.
This fast-growing franchisor and operator of chiropractic offices gives patients an affordable and accessible way to treat their back pain, with sessions costing as low as $29 and no appointments required. The remarkable success speaks for itself, as The Joint Corp. has more than doubled its store base since 2015. This wellness company has also proven it can do well in both good and bad times. Systemwide same-store sales jumped 9% in 2020 despite the negative effect of pandemic restrictions.
The Joint Corp.'s stock has already been a huge winner, skyrocketing more than 500% in just the past 12 months. But the growth story isn't over. Management thinks the U.S. can support a whopping 1,800 clinics one day, leaving plenty for shareholders to cheer about.
4. The TV operating system of the future
Streaming entertainment continues taking share from traditional cable TV, and Roku (ROKU 2.94%) stands to gain immensely. The $49 billion innovator connects viewers, content companies, and advertisers all in one powerful platform. Revenue in the most recent quarter soared 81% versus the prior-year period, and Roku's 55.1 million active accounts streamed a remarkable 17.4 billion hours of content during the second quarter.
Like Etsy, Roku's competitive strength lies in its network effects. Advertisers increasingly want to go where the eyeballs are, and Roku provides a tool for them to target audiences via connected TVs. Additionally, this attracts content companies that want Roku's distribution. It all creates an unstoppable flywheel that gets better over time.
For consumers, Roku's easy-to-use interface brings all of your subscriptions together. And because an estimated 70% of streaming happens on a TV, Roku is well on its way to controlling our living room entertainment experience. The business benefits as long as streaming keeps becoming more popular, which is definitely the case. By 2025, the U.S. will have only 60 million cable-TV households, down from 100 million in 2015. Don't be surprised if Roku is several multiples of its current size in the next decade.
