Growth stocks may not be the favored investment of choice as they were in the early days of the pandemic, but plenty of wonderful companies in this category are begging to be bought.
Don't get me wrong; growth stocks aren't for everyone. Besides having a long-term investment horizon, putting your cash into these kinds of companies also requires a certain level of risk tolerance. At the same time, in my view, these stocks feature some of the most compelling businesses of our day at the forefront of their respective industries.
Here are two such stocks to consider if you have $500 to invest in the stock market right now.
1. Airbnb
The travel rebound has certainly been great news for Airbnb (ABNB 0.10%), but this is far from the only catalyst driving the company's current and future growth prospects. People don't just use Airbnb for vacation. More and more customers are using the platform to find rentals they can live in for weeks, if not months, at a time.
This trend has been greatly helped by the fact that an ever-increasing number of companies across a wide spectrum of industries -- including Airbnb -- rolled out hybrid and remote work policies that give employees newfound flexibility to determine their preferred workspace.
As of Airbnb's latest quarterly report, long-term stays (which refer to stays of 28 days or longer) not only comprised the company's fastest-growing business segment but were up 90% from pre-pandemic levels. Meanwhile, Airbnb's revenue and nights/experiences booked rose 73% and 24%, respectively, compared to the second quarter of 2019. And where Airbnb reported a net loss of $68 million in the year-ago quarter, it recorded $379 million in net income in the second quarter of this year.
Shares of Airbnb have been caught in the broader market beatdown that investors witnessed in recent months. In my view, this only makes a more compelling case to snatch up this innovative growth stock while it's still trading down.
2. Starbucks
Starbucks (SBUX -1.02%) is hardly a company that needs an introduction. The name itself evokes nearly unparalleled customer loyalty, with just one example being the wholly unbridled enthusiasm Starbucks elicits when it announces every year that pumpkin spice latte season has officially begun. In fact, it's estimated that the company sold more than 600 million pumpkin spice lattes since the product first made its debut nearly 20 years ago. With the average cost of a pumpkin spice latte -- or PSL as it's known -- currently running around $6, I'll let you do the math on that one.
Pumpkin spice lattes alone may not be a reason to invest in Starbucks, but when looking at the company's performance as a whole, a resilient growth story emerges. The company's global comparable store sales rose 3% in the most recent quarter, while consolidated net revenues jumped 9% year over year to an all-time quarterly high of more than $8 billion. Starbucks also opened 318 net new stores in the three-month period, growing its store count to just shy of 35,000 locations.
Some investors may be skittish about the stock due to some of the headwinds the retailer faced earlier in the pandemic, recent management upheaval, and the PR backlash from alleged efforts to fight workers wishing to unionize. While these developments may continue to pose some near-term volatility for the stock, its incredible brand authority coupled with steady business growth are compelling reasons to take a second look at the growth-oriented stock while it's trading at a discount.
As a final note, the stock has also been a steady dividend payer since 2010 and has a current yield of 2.2%. Over the past decade, Starbucks increased its dividend by a whopping 367%.
