Retail investor trading website and app Robinhood Markets may not be delivering the juicy returns shareholders were hoping for in the current market, but the use case for the platform hasn't gone anywhere. Investors can evaluate some of the most popular companies with fellow investors by looking at the running list of Robinhood's top 100 stocks, which are the most owned stocks on the platform at that moment.
The platform also makes it easy to buy whole or fractional shares of just about any company. Of course, you should always do your research before you buy shares of any stock, and just because a company is popular with investors doesn't make it a great buy.
On that note, if you're on the hunt for fantastic businesses to add to your personal portfolio in the near future, here are three top stocks to consider.
1. Airbnb
Airbnb (ABNB 0.75%) has managed to keep its business fresh for consumers and steadily growing even as economic storm clouds have lingered and competition in the travel industry heats up. This resilience goes back to multiple elements that remain core to Airbnb's business model. Airbnb isn't designed for one or two types of travelers but for every traveler and travel need.
From long-term stays to short-term stays to vacations to live-and-work arrangements, the fact that just about any kind of traveler can book a stay that aligns with their needs in more than 220 countries globally and counting is a strong competitive edge. As of the most recent quarter, roughly 18% of all stays booked on the platform are for 28 nights or more, and 45% are for seven days or more. Airbnb is benefiting from the expansion of the travel industry following the worst of the pandemic.
This is not just about a resurgence in travel but also a testament to the reality that more flexible forms of travel have emerged in a world far more favorable to remote/hybrid/flex work than it was a few years ago. Airbnb is in prime position to benefit from all forms of travel demand, all without incurring the same overhead operational costs that many other travel businesses do because it doesn't own the properties on its platform. The company pulled in revenue of $2.5 billion in the most recent quarter and free cash flow of $900 million.
If you're wondering how those figures measure up to Airbnb's pre-pandemic growth story, they represented respective increases of 105% and 644% from four years ago. The company also generated profits of $650 million in the second quarter alone, compared to $379 million in the year-ago quarter. Business is booming as Airbnb continues to refine its platform to attract new hosts as well as guests. Active listings just hit an all-time high of more than 7 million. Even if a recession happens, this business is in a solid position to capitalize on the long-term picture for the travel industry.
2. Amazon
Amazon (AMZN 3.43%) has reinvented itself a few times in the nearly three decades since its inception, and the current era doesn't look to be any different. While it's true that macroeconomic headwinds slowed the trajectory of many businesses in high-growth industries, and Amazon has been one of them, companies that revolve around broad and steady consumer demand can stem the tide.
In 2022, Amazon reported its first unprofitable year in nearly a decade, which wasn't necessarily surprising given spending headwinds from both individual and enterprise customers. The company made some drastic operational moves, including a series of well-publicized layoffs to slash costs. Now, Amazon is profitable once more, and revenue is rising.
The company brought in $134 billion on the top line in the most recent quarter, while profits totaled $7 billion. Amazon is also free-cash-flow-positive again. The company remains an indomitable force in the e-commerce and cloud computing industries while expanding its range of products and services. Amazon recently started producing its own chips and is investing billions into artificial intelligence as part of a broader plan to wave AI services into its collection of cloud infrastructure offerings.
The company also just launched Supply Chain by Amazon, a suite of supply chain services to enable its third-party merchants (who generate the majority of sales on the e-commerce platform) to fulfill orders more seamlessly than ever before. Sellers who choose this service can rely on Amazon to do everything from picking the product up from the original manufacturer to handling customs clearance to getting the product into the hands of the customer.
Investors should still factor in the impact of economic headwinds on Amazon's various businesses in the short term, but for long-term shareholders, a buy-and-hold position in this tech stock still looks like a winning choice.
3. Starbucks
Starbucks (SBUX 0.47%) is another household name forced to contend with the highs and lows of a volatile economic environment. Amid this backdrop, the company is growing its store count and steadily rewarding shareholders with the fruits of its labors in the form of dividend payouts.
The stock currently yields around 2.5%, higher than the average yield of S&P 500 stocks (around 1.5%). In case you're wondering how faithful a dividend payer this company is, Starbucks just hiked its cash dividend for the 13th year in a row. Now $0.57 per share, that figure represents a compound annual growth rate of 20% from 13 years ago.
Coffee consumption can drop in tough economic times. Starbucks' largest markets are the U.S. and China, with 61% of its stores located in these two countries. The company also had to contend with a series of COVID-19 resurgences in China that forced prolonged store closures. These headwinds appear to be subsiding slowly but surely, and the long-term picture still looks good for this market leader, particularly as profits and revenue continue to rise.
Global comparable sales rose 10% year over year in the most recent quarter, while revenue jumped 11%. Starbucks' bottom-line growth was even more impressive, as profits soared 25% from the year-ago period. The company closed out the quarter with 31.4 million rewards members in the U.S., a 15% increase from one year ago and nearly double its membership count before the pandemic.
Starbucks benefits from an expansive global footprint, strong market leadership, and incredible customer loyalty. With its finances slowly but surely whipping back into shape, investors who've been waiting on the sidelines may want to take a second look at the stock.
