10 Best Stocks of 2020

The list of true winners in the 2020 stock market has narrowed significantly since the spring, but many favored stalwarts from prepandemic days have continued to impress. From tech to healthcare, the companies on this list have kept their word to investors and are excellent long-term buys to construct a more diversified, recession-resistant portfolio.

Let’s take a look at 10 stocks that have risen above all odds this year and could add that vital mixture of growth and value to your portfolio for decades to come.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

With millions of consumers across the globe facing quarantines and lockdowns throughout this year, it’s not at all surprising that e-commerce giant Amazon (NASDAQ: AMZN) quickly became the poster child of stay-at-home stocks. Shares of the company are up nearly 67% year to date. Amazon has reported consistent year-over-year double-digit sales growth throughout the pandemic -- 26% in Q1, 40% in Q2, and 37% in Q3.

ALSO READ: 3 Stocks That Can Double Again in 2021

Teladoc Health (NYSE: TDOC) was a clear leader in digital health before the pandemic, and this year has further cemented its dominance of the fast-growing sector. The company completed its landmark merger with health management platform Livongo in October. The merger formed a virtual care provider of behemoth proportions that will continue to drive Teladoc’s exponential growth in the coming years. During the third quarter ended Sept. 30, Teladoc grew its platform visits by 206%, while its total revenue for the three-month period was up 109% compared with the same period the year prior.

As consumers in lockdown have turned to scroll the endless array of visuals and creative content to be found on Pinterest’s (NYSE: PINS) platform, the popular social media stock has reaped the rewards.

The company’s third-quarter financials revealed just how much consumers have come to rely on the platform’s content in recent months. During that three-month stretch, Pinterest reported its revenue up 58% year over year. The company also grew its monthly active users by double digits in Q3 -- up 37% compared with the third quarter of 2019.

To be clear, Pinterest was a solid play before the pandemic hit. In 2019, the company reported 51% revenue growth compared with 2018.

Another top stay-at-home stock in 2020, Zoom Video Communications (NASDAQ: ZM) has become a fixture for many households, from socially distanced family get-togethers to important business calls.

Some investors have been critical of Zoom’s heightened popularity this year, arguing that the stock’s viability as a long-term investment might fade once a vaccine hits the market and a sense of normalcy starts to creep back into our daily lives. However, Zoom was reporting superior growth figures before the pandemic. Case in point, during fiscal 2020 (which ended on Jan. 31), the company grew its revenue 88% from fiscal 2019.

It’s true that Zoom may not be able to replicate its pandemic-era revenue growth indefinitely. The company has reported revenue growth figures of 169% in Q1, 355% in Q2, and 367% in Q3, compared with the same quarters in the previous fiscal year. However, analysts still forecast above-average growth for the company over the next several years. Zoom has all the markers of a fantastic stock to buy and hold in 2020 and beyond.

ALSO READ: 3 Top Tech Stocks to Buy in December

Not only is Lowe’s (NYSE: LOW) a veteran Dividend Aristocrat with more than four decades of consecutive annual dividend increases under its belt, but the company’s essential business designation has helped it stand firm in the pandemic economy. The third quarter was a particularly good one for Lowe’s, during which it reported a 30.4% year-over-year increase in U.S. comparable sales and a 106% digital sales boost.

The company distributed $416 million in dividends to shareholders during the quarter while closing the period with $8.2 billion in cash and cash equivalents. Lowe’s dividend currently yields 1.6%.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

One of the top manufacturers and developers of continuous glucose monitoring (CGM) devices, DexCom (NASDAQ: DXCM) may not be in the most glamorous industry, but it’s a highly profitable one. More than 34 million people have diabetes in the U.S. alone, which means that DexCom’s CGM products are in demand regardless of the state of the economy.

DexCom reported first-, second-, and third-quarter revenue growth numbers of 44%, 34%, and 26%, respectively. Management expects the company to carry this growth streak to the finish line, projecting 29% revenue growth for the full year.

Johnson & Johnson (NYSE:JNJ) is a popular Dividend Aristocrat that yields roughly 2.7% for investors at the time of this writing. However, most investors have been focusing on the company’s coronavirus vaccine.

The vaccine candidate (JNJ-78436735) is being studied and developed by Johnson & Johnson’s subsidiary Janssen Pharmaceutical Companies. The vaccine has advanced to two global phase 3 human trials that are ongoing at the time of this writing. The first phase 3 trial, called Ensemble, will encompass up to 60,000 subjects taking a single-dose regimen of the vaccine. The other, Ensemble 2, will encompass up to 30,000 individuals and subjects will take two doses.

Even though Johnson & Johnson’s sales declined modestly earlier this year, its balance sheet rebounded in the third quarter with sales up by nearly 2% year over year.

ALSO READ: 3 Dividend Aristocrats to Buy and Hold Forever

Chipmaker NVIDIA (NASDAQ:NVDA) has had a great year. Investors have been flocking in droves to buy up shares of the company, while the stock has gained roughly 125% year to date.

In NVIDIA’s recent financial report for the third quarter ended Oct. 25, management stated that the company’s revenue had grown 57% on a year-over-year basis. NVIDIA’s gaming revenue increased by double digits during the three-month period, while its data center revenue surged by triple digits. In total, these revenues were up 37% and 162%, respectively, compared with the same periods in 2019.

The company also paid nearly $100 million out to investors during the third quarter in the form of cash dividends. NVIDIA’s dividend currently yields around 0.12%.

Identity company Okta (NASDAQ: OKTA) is another growth stock that has made its investors particularly happy this year. The company grew its revenue by the mid double digits during the first three quarters of 2020 -- 46%, 43%, and 42%, respectively, compared with the same quarters in 2019. Okta closed the third quarter with its free cash flow representing 19% of its overall revenue for the three-month period, and management is projecting 40% revenue growth for the full year 2020.

A key developer and manufacturer of cystic fibrosis drugs, Vertex Pharmaceuticals (NASDAQ: VRTX) has remained one of the untouchable stalwarts of the healthcare sector this year. The company reports its product revenue up 77% year over year in the first quarter while achieving 62% revenue growth in the second and third quarters compared with the same periods in 2019.

Vertex has four cystic fibrosis drugs in its stable, with the newly launched blockbuster drug Trikafta being its most profitable. That drug alone brought in $1.5 billion in revenue for the company during Q3. Vertex closed the third quarter with a robust $6.2 billion in cash, cash equivalents, and marketable securities on its balance sheet.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Although the stock market has consistently booked record highs over the past few months, some investors are worried that another crash could be lurking around the corner. It’s natural to feel uneasy at the potential prospect of another market downturn.

But the steps you take now to structure your portfolio with a blend of growth, value, and dividend stocks that fit your personal investing philosophy and appetite for risk can ensure you’re prepared if the bottom does fall out again.

The stocks on this list have certainly been top-notch buys in the pandemic market, but they were also attractive investments before 2020. Even as demand for a number of these companies’ products and services has heightened due to the pandemic, volatile market conditions have also revealed the fundamental strength of their businesses and balance sheets. Investors shopping for companies to buy and hold for the new year and beyond should take a second look at these stock market gems.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rachel Warren has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, NVIDIA, Okta, Pinterest, Teladoc Health, and Zoom Video Communications. The Motley Fool recommends DexCom, Johnson & Johnson, Lowe's, and Vertex Pharmaceuticals and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.