No one likes inflation. If you're a long-term investor, the prospect of increased volatility and the knowledge that your cash won't get you as far as it did just a few months ago is likely to make you even pickier when you go shopping for stocks.
Not all stocks react to inflation in the same way. For example, if a company is able to successfully factor rising rates of inflation into the cost of the products/services it sells, it could ride out these economic periods with minimal negative effects on its balance sheet or shares. It's also true that some industries are more prone to overcome the headwinds caused by inflation than others.
Rather than trying to time the market during this turbulent period, there's a much more effective way to consistently optimize your portfolio growth. When you invest often in high-quality companies with strong core businesses, robust balance sheets, persistent demand for their products, and a track record of enriching investors through steady share price appreciation and/or dividends, you can garner returns in a variety of market conditions without trying to guess the best time to buy.
To that end, here are two top stocks to invest $1,000 in right now.
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1. Adobe
Adobe (ADBE 0.89%) is known for its extensive roster of software products used by individual consumers and businesses around the world, including Photoshop, Lightroom, Adobe Acrobat, Adobe Sign, and Illustrator.
The software-as-a-service (SaaS) stock has continued to deliver impressive business results and balance-sheet increases throughout the pandemic, building on a solid track record of successive annual revenue growth (in 2016, 2017, 2018, 2019, and 2020, the company reported respective revenue increases of 22%, 25%, 24%, 24%, and 15%). It's also worth noting that in 2020, a year in which companies across all sectors faced tough business environments due to the coronavirus pandemic, Adobe reported record revenue of $12.9 billion.
In Adobe's most recent quarterly report, it recorded impressive year-over-year revenue growth of 23%, along with double-digit revenue growth across its key business segments. And in the first six months of 2021, Adobe's revenue surged 24% while its net income popped 16% from the same time period in 2020. As of the beginning of June, Adobe recorded total assets of $25.6 billion as opposed to total liabilities of $11.7 billion, and cash and cash equivalents to the tune of $4.3 billion.
The SaaS industry represents a multibillion-dollar market -- one that's on track to hit a global valuation of more than $307 billion as of the year 2026. Adobe controls about a 10% share of this insanely lucrative market, second only to Microsoft and Salesforce.
Shares of Adobe have gained nearly 30% over the past year. And looking back at where the stock was trading five years ago, it's yielded a more than 530% return for shareholders.
Adobe's robust balance sheet growth, profitability, steady share-price appreciation, and attractive liquidity are everything an investor would hope to see from a top tech stock in this increasingly volatile market. Whether you're trying to protect your portfolio from the pitfalls of inflation or shore up your holdings for the next market crash, Adobe is a golden egg to buy and hold in your basket for the long haul.
2. Innovative Industrial Properties
Investing in top marijuana stocks can be a great way to boost your returns and get in on the action of this super-charged industry. As both medical and recreational marijuana legalization expands, companies with established presences in either space can lend considerable growth to a long-term investor's portfolio.
One such company is Innovative Industrial Properties (IIPR 0.06%), a real estate investment trust (REIT) that leases its portfolio of 74 commercial facilities to licensed medical marijuana growers all over the U.S. Innovative Industrial Properties' portfolio currently includes properties in the states of Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Texas, Virginia, and Washington.
In the second quarter, Innovative Industrial Properties generated 101% revenue growth, 124% net income growth, and 104% AFFO growth from the year-ago period. And if you're wondering what the REIT's previous track record of balance sheet growth looks like, the answer is beyond stellar. In the years 2019 and 2020 alone, it also reported triple-digit increases to its revenue, net income, and AFFO.
While shares of the company have appreciated by nearly 100% over the past year alone, investors can also snag impressive returns by investing in this stock for its notable dividend. The stock yields 2.3% based on current share prices, and habitually boosts its payout.
If the volatility and lack of profitability that have plagued some pot stocks have put you off investing in the marijuana boom, Innovative Industrial Properties' mouthwatering financial performance, stock gains, and juicy dividend are all compelling reasons to hit the buy button. On the flip side, if you're already invested in pot stocks and looking to increase your positions in solid companies leading the charge in this fast-growing industry, Innovative Industrial Properties belongs on your buy list.
