The stock market continues to generate mixed performance amid high volatility and rising investor trepidation over inflation. But even with the current state of the market, there are still plenty of opportunities for long-term investors to add wealth-building catalysts to their portfolios.
If you’re on the hunt for stocks that can help you ride out current and future waves of market volatility while contributing to your overall investment goals, you’ve come to the right place. Today, we’re going to look at three companies that have continued to flourish amid the highly charged market cycles of the last year. And they’ve all recently reported another strong quarter of earnings growth.
Social media company Pinterest (NYSE:PINS) continues to deliver astonishing balance sheet growth quarter after quarter. Its visual search business model has made the platform an increasingly instrumental advertising tool for companies to market their products and services to Pinterest’s vast user base. And for the millions of individuals around the world who use Pinterest on a regular basis — at last count, the company had 478 million global monthly active users — the platform makes it fun and easy to find everything from the latest recipes, craft ideas, and fashion trends to “pinnable” quotes and travel inspiration.
In the first quarter of 2021, Pinterest’s revenue surged by a robust 78% from the year-ago period. In addition, the company’s monthly active user count soared by 30%, and the average revenue per user increased 34% year over year. Pinterest is also continuing to ramp up its available liquidity. It closed the three-month period with total assets of approximately $2.7 billion (about $914 million of which are cash and cash equivalents) and a far lesser $363.5 million in total liabilities.
These stellar figures are a continuation of the momentous period of growth Pinterest reported in 2020, during which time its revenue increased 48%. It’s also important to remember that Pinterest was reporting notable balance sheet growth long before the pandemic drove a global spike in digital usage. In 2019, which was Pinterest’s first year as a publicly traded entity, the company reported 51% revenue growth. And in 2018, it generated revenue growth of nearly 60%.
Analysts are expecting great things from Pinterest over the next few years. They project that the company can deliver an average earnings growth rate of more than 240% per annum over the next five-year period alone.
Pinterest has gained more than 200% over the trailing 12 months, but still trades for less than $70 a share. If you’re looking for a stock that can deliver long-term balance sheet growth and meaningful portfolio returns in all kinds of market situations, Pinterest is a smart stock to add to your buy list.
E-commerce stock Etsy (NASDAQ:ETSY) is another golden egg to add to your buy basket that looks primed to withstand whatever the market throws its way. Online shopping is the go-to option for the global consumer populace to shop with ease, whether at home or on the go. According to Statista, “In 2020, over 2 billion people purchased goods or services online, and … e-retail sales surpassed 4.2 trillion U.S. dollars worldwide.”
Etsy’s platform enables its global user base to find niche, custom, and vintage goods from artisans and creators around the world. The originality of Etsy’s business model is part of what’s made it so profitable. In 2020, Etsy’s revenue and gross merchandise sales shot up by respective rates of 111% and 107%, while its net income surged 264% from 2019.
While the height of the pandemic and a surge in online shopping last year drove strong business and balance sheet growth, Etsy isn’t slowing down anytime soon. During the first quarter of 2021, the company’s revenue and gross merchandise sales spiked 142% and 132%, respectively. Most notable was its net income growth — 1,048% year over year. Etsy also said that there were 67% more active sellers and 90% more active buyers on its platform during the first quarter than in the year-ago period.
Etsy is diligently expanding its presence in the global e-commerce industry, and specifically, in the area of unique and specialty goods. The company announced on June 2 that it intends to acquire the fashion retail marketplace Depop for $1.6 billion, with the purchase set to close in the third quarter of this year.
In Etsy’s press release announcing the acquisition, management said that “Depop’s 2020 gross merchandise sales and revenue were approximately $650 million and $70 million, respectively, each increasing over 100% year over year,” and that “Depop is the 10th most visited shopping site among Gen Z consumers in the U.S.” Etsy’s CEO Josh Silverman said in announcement: “We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous ‘house of brands’ portfolio of individually distinct, and very special, e-commerce brands.”
Shares of Etsy are trading 116% higher than just one year ago. As Etsy continues to grow its family of brands and its balance sheet, shares could jump significantly higher. It’s a great time to invest in Etsy to capitalize on its decades-long growth potential.
Last but not least, another compelling growth play for investors to consider is COVID-19 vaccine leader Pfizer (NYSE:PFE). Few healthcare stocks have generated as much press as Pfizer over the past year. The COVID-19 vaccine it developed with BioNTech, called Comirnaty, has not only changed the landscape of the fight against the pandemic but significantly augmented Pfizer’s balance sheet growth.
Pfizer reported a wave of new developments related to its COVID-19 vaccine in May 2021. Pfizer and BioNTech filed for full approval of the vaccine with the U.S. Food and Drug Administration, and Comirnaty was authorized for adolescents between the ages of 12 and 15 in both the U.S. and the EU under their respective emergency use and conditional marketing authorizations.
Pfizer and BioNTech also inked a historic vaccine supply deal with the EU last month. On top of the 600 million doses the companies are already supplying to the EU through the end of this year, Pfizer and BioNTech will now deliver up to 1.8 billion more doses of Comirnaty through 2023.
Pfizer reported a robust period of growth in the first quarter of 2021. The company’s total revenue of $14.6 billion represented a 42% increase from the first quarter of 2020. Sales of Comirnaty accounted for roughly one-fourth of Pfizer’s total revenue in the quarter. The vaccine is now expected to bring in a total of $26 billion in revenue this year. But thanks to other top-selling products like Eliquis and Xeljanz, along with 79% revenue growth in its biosimilars segment, Pfizer still generated 8% revenue growth in the first quarter even when you factor out sales of Comirnaty.
Pfizer is expecting to generate total revenue between $70.5 billion and $72.5 billion in 2021. The company was already one of the largest pharmaceutical companies in the world before its star power exploded on the heels of Comirnaty’s blockbuster status. Pfizer’s portfolio of highly profitable products — now boosted by its leadership in the COVID-19 vaccine sphere — make it a compelling growth play that you can easily buy and hold forever.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.