- Investors shouldn’t have to worry about the short-term volatility of these stocks;
- Both of the companies below are industry leaders and the growth opportunities in these industries are enormous;
- Opening a position in one of these stocks (or both) now will bring big dividends in the future.
Growth stocks were trending in the past year, especially those from industries not heavily affected by the pandemic crisis, and many have doubled or even tripled in value in 2020. But in 2021, things changed for some of these companies. Case in point: Telemedicine giant Teladoc Health (NYSE: TDOC) is down 26.6% this year, while Square (NYSE: SQ) is up 9%. In comparison, the S&P 500 gained 15% over the year.
Both of these companies significantly overtook the market in the past year, and even with their less impressive results in 2021, there is good reason to believe their future is bright. This is why both of these stocks are worth buying and hiding in your portfolio for years to come.
In an increasingly digital world, it is no surprise that medicine increasingly relies on innovative technologies. Telemedicine is one such example and Teladoc is a leader in this field. Virtual consultations with doctors help save time and money and allow more consultations. And, of course, they are extremely patient-friendly.
In other words, everyone wins, which is why the telemedicine industry will continue to grow at a rapid pace. Teladoc will capitalize on this long-term trend as the use of telemedicine services increases among insurance companies, businesses and individuals. The large number of medical professionals employed by the company and the wide range of services it offers are the main reasons why it can attract new clients and retain those who are already using its services.
Specialized assistance is likely to be one of the key drivers of Teladoc’s growth. In October 2020, the company acquired Livongo Health, a health management service provider for people with chronic conditions, for $ 18.5 billion in cash and stock.
Livongo Health has already been quite popular, especially in its main market, among people with diabetes. This acquisition helped Teladoc expand its reach to this patient population. Teladoc’s revenue increased 151% to $ 453.7 million in the first quarter of 2021. Meanwhile, the total number of medical consultations provided by the company rose 56% to 3.2 million.
While the pandemic did a lot to boost Teladoc’s reputation over the past year, the company appears well positioned to ride this positive wave for many years to come, despite recent difficulties in the stock market. Adding this stock to your portfolio today would be a great move.
The financial industry also does not stay away from the trends dictated by the times and is increasingly introducing digital technologies. We don’t live in a world with a completely cashless financial system yet, but digital payments continue to grow and Square is one of the best players in the market to take advantage of this opportunity.
The company is known for a wide range of business services:
- Cash register systems and related software;
- Payroll and Inventory Services;
- Small business loans;
- Business intelligence tools, etc.
CEO Jack Dorsey once called the ecosystem Square “The main difference of the company”, and there is certainly some truth in this. The company’s completeness of services means that once customers get to Square, they are more likely to stay there. As a result, the ecosystem of sellers grows and the recurring income increases.
It also gives Square additional monetization opportunities. For example, the company began offering e-commerce storefronts to business owners. Its ecosystem is undoubtedly a great asset, but the peer-to-peer Cash App will be another major growth driver for the company.
Nowadays, Cash App has evolved into more than just an app that helps facilitate secure transactions between friends. It now offers direct deposits, the ability to easily (commission-free) buy stocks and bitcoins, and custom debit cards. Square’s long-term plan is to provide as much banking as possible to the underprivileged, and the opportunities are enormous. The company estimates that in the US alone, not to mention the rest of the world, Cash App is just beginning to tap into an estimated $ 60 billion market.
With that being said, there is a huge chance that Square will significantly outperform the market in the long run, making it a great stock to add to your portfolio.
Think long term
Square and Teladoc share at least three things in common:
- First, their business is focused on innovative technologies;
- Second, they have managed to build strong ecosystems that give them a significant competitive advantage;
- And third, both have huge growth opportunities in their respective industries.
These three factors make both of these stocks look like great long-term investments.
Based on materials The motley fool
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