10 Companies Thriving During the Coronavirus Pandemic

Perhaps it was inevitable that a global pandemic would eventually sweep across our increasingly interconnected world. Television shows and movies have been based on the notion for years. And still COVID-19, or more precisely the effort to slow its spread, has shocked the economic and social systems we rely on every day. Once-proud companies are floundering, others are simply going out of business.

Despite all of the difficulties being faced today, however, there are still some companies that are actually doing okay. In fact, some would be best described as thriving. Here's 10 names, many of which you'll already know, that are thriving during the coronavirus pandemic. The best part, however, is that their ability to handle this extreme event suggests that their post-COVID-19 futures could be even brighter.

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If there's a company that was tailor made to benefit from people being forced to stay home it would probably be Netflix (Nasdaq: NFLX). The stock was up roughly 30% year to date through the end of May, versus a 5% or so decline for the S&P 500 Index. The streaming giant with a global reach offers exactly what people need to occupy their free time and keep their children from climbing the walls while the world self quarantines. In fact, the company's subscriber base expanded nearly 23% year over year in the first quarter. Net new subscriber additions roughly doubled between the fourth quarter of 2019 and the first quarter of 2020.

It's likely that new additions will slow from the first quarter's rapid clip, but once Netflix has a new customer on the hook it can be very hard for that subscriber to give up all of the video streaming options it offers. Moreover, the company earned $1.61 per share in the first quarter, up 20% sequentially from the fourth quarter and roughly twice what it made a year ago. Clearly Netflix is doing well today and as its service is introduced to more customers because of COVID-19, the company's future looks even brighter than it did before the crisis.

ALSO READ: Netflix Is Turning Into a Profit Machine

In addition to occupying minds, people stuck at home have also been looking to occupy their mouths. That's exactly what Domino's Pizza (NYSE: DPZ) is all about, delivered, of course, right to a customer's front door. The key here is that, when COVID-19 hit, Dominos wasn't trying to figure out how to shift its business to handle takeout. Takeout, with an industry-leading online presence, is exactly what Domino's has always done. First quarter same store sales grew 1.6% domestically and 1.5% internationally, with earnings up nearly 40%. The stock gained roughly 33% in value through the first months of the year compared to an approximately 5% decline for the S&P 500 Index.

The company has highlighted that the future is cloudy because of COVID-19. A big piece of that is the risk that the world falls into a recession because of the efforts to slow the spread of the coronavirus. However, Domino's food (pizza and wings) tends to be pretty cost effective relative to other options, so there's no particular reason to expect it to suddenly struggle more than peers. Moreover, customers have been getting increasingly comfortable ordering over the internet because of the present situation and that, ultimitally, plays to one of Domino's strong suits. This takeout specialist looks highly likely to prosper through COVID-19 and its aftermath.

The next company up isn't one you'd expect, since its core business is pest control. The thing is, the bugs and rodents that Rollins, Inc. (NYSE: ROL) dispatches don't actually care too much about whether or not there's a global pandemic going on. In fact, the more people are home, the more likely it is that the conditions for an infestation (such as food being left around or trash piling up) show up and that someone will be there to notice and call Orkin (the main brand in Rollins' portfolio). Pest control, it's worth noting, was deemed an essential service by the U.S. government. Rollins also took this opportunity to launch a new disinfecting service, which is a little outside its normal sphere of business but should benefit from its existing customer relationships.

The first quarter was a good one, with revenue up nearly 14% year over year, helped along by acquisitions. The bottom line was roughly flat, as the company adjusted to the COVID-19 crisis by providing its service technicians additional protective equipment and increased its internal cleaning regiment. Those efforts increased costs. That said, the company has a strong balance sheet (long-term debt is just 30% or so of the capital structure) and its business is as resilient as the bugs it is hired to kill. If you are looking for a company that can do well in both good times and bad, Rollins is a name you'll really like. The stock, for reference, advanced roughly 27% year to date through May, as the S&P 500 Index lost roughly 5% of its value.

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Walmart Stores (NYSE: WMT) is next, and helps bridge the divide back from the physical world of pest control to the digital world. This giant retailer has a massive brick-and-mortar footprint, with stores that span from selling food to clothing, and just about everything in between. Although in some ways it is the epitome of the old way of doing retail, its stores were largely open through the COVID-19 shut downs. Walmart's physical stores were, in fact, doing pretty well while other retailers struggled. And it also has a large and growing online presence.

The company's first quarter results show just how well positioned Walmart is today. In one of the worst quarters in recent memory for retailers, the company's global sales increased 8.6%. Adjusted earnings were up roughly 4.5%. And before you worry that online is a weak spot, Walmart's e-commerce sales in the United States rose by nearly 75% in the quarter. Maybe Walmart will never be Amazon.com, but it is certainly holding its own. The stock outperformed the S&P 500 Index by roughly 8 percentage points year to date through the end of May. And with customers getting more comfortable visiting Walmart in both the physical and digital worlds, this retail giant is likely to thrive for years to come.

Having looked at Walmart, we would be remiss not to consider Amazon.com (Nasdaq: AMZN). While Walmart is pretty much the king of the physical retail world, Amazon is the king of the digital retail world. That, of course, made it a prime (pun intended) beneficiary of the stay at home orders and non-essential business shutdowns that were used to slow the spread of COVID-19. Since consumers couldn't go to the store, they went online. Amazon's sales increased a heady 26% in the first quarter. Amazon's stock, meanwhile, rose by a third during the first five months of 2020, a period that saw the S&P 500 Index fall by about 5%.

It's the big picture here that is most important. The shift toward online shopping is likely to have been accelerated by COVID-19, which is a huge benefit to Amazon's online business. However, interestingly enough, Amazon has also been building a brick-and-mortar business. That includes grocer Whole Foods, but also Amazon branded stores. And there are rumors that Amazon is looking to use the devastation in the physical retail sector to expand its brick-and-mortar footprint. For example, it has been rumored as a potential suitor for now-bankrupt J. C. Penney. Thus, Amazon is directly benefiting today, it will likely benefit from sped up online adoption rates, and it could even benefit from picking through the rubble of struggling brick-and-mortar stores. Sure, it may end up looking more and more like Walmart, but with Walmart trying to look like Amazon, the two will probably meet in the middle. And both look like long-term winners in that scenario.

ALSO READ: 3 Top E-Commerce Stocks to Buy in June

Let's do one more digital/physical play, with real estate investment trust (REIT) Digital Realty Trust (NYSE: DLR). REITs own physical property, how are they digital? In this case, Digital Realty Trust is one of the world's largest publicly traded owners of data centers. That's where companies like Amazon and Walmart host their online services. If more people are online it means more demand for the properties that Digital Realty owns. And as more companies realize they have to move online, or at least pick up the pace of their online transition to keep up with the Amazons and Walmarts of the world, demand will keep increasing even after COVID-19 has passed. The stock rose nearly 20% in the year-to-date period through May, compared to a roughly 5% drop in the S&P 500 Index.

The thing is, this isn't a near-term play. You don't just put up a data center overnight. In fact, the company's revenue was up just 5% year over year in the first quarter and 1% sequentially from the fourth quarter of 2019. While that may not sound impressive, most other REITs (like retail, office, and apartment landlords) are worried about their ability to collect rent checks. Worse, a huge number of REITs have cut or even eliminated their dividends. Digital Realty increased its dividend in mid-May. Clearly, it's data center focus is a near-term winner. It's likely to be a long-term winner as well.

With so many people working from home, video conferencing services have been in high demand. That's resulted in the shares of Zoom Video Conferencing (Nasdaq: ZM) taking off like a rocket, up around 185% in the first five months of the year. Wall Street has a way of getting ahead of itself, and for what really amounts to an upstart with a niche product, most investors are probably better off assuming they missed this one. It would be far better to look at Microsoft (Nasdaq: MSFT), which offers the same types of services and much, much more. In fact, Microsoft is the type of industry heavyweight that could gobble up a Zoom once investors move on to another hot story and the stock price comes back down to Earth. Microsoft's shares were up about 15% year to date through May, which isn't as exciting as Zoom's gain, but hard to complain about when you consider that the S&P 500 Index was down 5%.

The thing is, despite being a massive technology company, Microsoft remains a pretty nimble name. And it's putting up strong numbers despite COVID-19, with fiscal third quarter 2020 revenue up 15% year over year. Earnings advanced 23%. With big positions in cloud computing, business software, gaming, and more, why take a risk on a one-trick pony like Zoom? Video conferencing's day in the sun will eventually fade. Better to diversify your business software bet with a giant like Microsoft that can lean on other businesses to drive results after the coronavirus hype fades.

It isn't just businesses that have needed to find new ways to stay connected, it's individuals too. And one of the best ways to do that is via social networking giant Facebook (Nasdaq: FB). To be fair, the stock and the business are going in different directions right now. To put some numbers on that, the shares are up around 11% or so through May versus a loss of around 5% for the S&P 500 Index. Meanwhile, the company noted that demand for advertising, the primary way it makes money, had fallen dramatically when it released first quarter 2020 earnings.

That said, revenue was up 18% year over year in the first quarter, with earnings roughly doubling. It would be hard to suggest that Facebook is struggling. And even if there's a pullback in advertising in the near term, if Facebook can sustain its massive user base (active daily users increased 11% in the first quarter, with active monthly users up 10%), advertisers will come back when the economic outlook brightens. The company's strength is in its ability to attract users and that should carry this tech giant well beyond the COVID-19 era. In fact, COVID-19 has likely reminded people of just how useful a tool Facebook is in keeping up with distant, socially or otherwise, friends.

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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.

While the world has clearly started to lean on technology to continue working and socializing, there's an ugly underbelly that has to be dealt with: cyber crime. Fortinet (Nasdaq: FTNT) was helping defend companies and government around the world from online evildoers well before COVID-19 and it will continue to do so long after. However, it's safe to assume that the changes the coronavirus leaves in its wake, such as more work from home employees and increased reliance on the web, socially and for business, will only make Fortinet's offerings all the more important in the longer-term future. The stock gained roughly 32% through May, while the S&P 500 Index dropped 5%.

The first quarter, meanwhile, was a really good one for the company. Revenue was up 22% with earnings up 20%. But the most noteworthy takeaway from Fortinet's first-quarter results was that this performance was driven by internal investment in things like expanding into adjacent markets and augmenting the company's sales force. COVID-19 didn't even get mentioned in the earnings release. And during Fortinet's first-quarter 2020 conference call management basically stated that it saw no negative impact from the coronavirus. With that as a backdrop and the likelihood of the world getting more and more digital in the future, Fortinet looks like it has what it takes to deliver for years to come.

ALSO READ: The Cloud Powers Fortinet Higher During the Coronavirus Lockdown

So far this list has avoided anything too cutting edge, even choosing Microsoft over current Wall Street darling Zoom. But now it's time to take a bit of a flyer and look at Teladoc Health (NYSE: TDOC), which has doubled in value in just five month's time (verus a 5% decline for the S&P 500 Index). The company provides digital medical services across a broad spectrum of the healthcare space, from routine check ins with doctors and mental health practitioners to consultations with experts. The first quarter was pretty incredible in some ways, with revenue increasing 41% (with subscription access fee revenue up 33% in the U.S. market and 17% internationally) and "visits" higher by an amazing 92%. But it wasn't so good in others, with the company reporting a loss of $0.40 per share, a touch better than the $0.42 per share loss in the previous year.

The big picture here is really the growth potential of telemedicine, which COVID-19 has suddenly brought to the fore. Online can't replace a visit to the doctor in some cases, but with people afraid to get too close to another human being, a video call with a doctor is proving to be enough for many routine things. And if it isn't, the technology serves as a gateway to the higher levels of care that are needed. To be fair, Teladoc is a one-trick pony, but it really has to be when it comes to this space. And while investors are hot on the idea despite the fact that Teladoc is losing money, the post COVID-19 world for healthcare is likely to see more use of telemedicine now that consumers have been given a much needed push to adopt the technology. This isn't a stock to bet the house on, but there's a reason to be optimistic that the future is bright here, even after coronavirus concerns fade.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, Digital Realty Trust, Facebook, Microsoft, Netflix, Rollins, Teladoc Health, and Zoom Video Communications. The Motley Fool recommends Domino's Pizza and Fortinet and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short August 2020 $130 calls on Zoom Video Communications. The Motley Fool has a disclosure policy.