Would you like to know the best stocks to buy right now? And what stocks can deliver market-beating returns for decades? You probably won’t be surprised to hear that I’m going to tell you about long term growth stocks. The right group of stocks can generate investment gains for years and even decades. How do I know this?
Profit is the key motive in both short and long-term investing. If you want to be able to generate earnings in future, then you need to ensure that the stocks that you buy generate profits in later years too. These stocks can be termed as best long term stocks 2021, and in this article we’ll look at such stocks in detail.
Shopify Inc. (ticker: SHOP)
Shopify is a great example of a growth stock that’s long traded for rich multiples – and still managed to reward shareholders with equally impressive returns. Shopify stock is, at a fundamental level, a bet on the continued growth of e-commerce. It provides merchants with ready-to-go and customizable online stores through its platform, operating through a lucrative subscription model that brings in reliable, recurring revenue. As the second-biggest e-commerce player next to Amazon.com Inc. (ticker: AMZN), Shopify has grown revenue at a remarkable 70% compound annual growth rate over the last five years. It’s only natural for that rate to decelerate, but last quarter sales still grew at a remarkable 57% clip. The pandemic accelerated e-commerce adoption in 2020, but globally, online sales still accounted for just 18% of retail revenue last year, leaving SHOP plenty of room for impressive growth in the years ahead.
Cresco Labs Inc. (OTC:CRLBF)
No. of Hedge Fund Holders: N/A
Cresco Labs Inc. (OTC: CRLBF), headquartered in Chicago, Illinois, is a cannabis and medical marijuana producer. The firm makes a variety of cannabis extracts and vape products. The company is eleventh on our list of 11 best stocks for long term growth
It is an appealing investment because it is one of the leading cannabis multi-state operators (MSOs). This company is a major marijuana wholesaler, with its branded products accounting for more than half of all sales. At the end of the second quarter of 2021 Cresco Labs Inc. (OTC: CRLBF) reported revenue of $210 million, an increase of 128% year over year. The company reported gross profit of $107 million in the second quarter of 2021, an increase of 22.2% quarter over quarter. Similarly, the company generated net income of $2.7 million in the second quarter of 2021, an increase of $44 million year over year.
On August 5, investment advisory Canaccord upgraded Cresco Labs Inc. (OTC: CRLBF) stock to Buy from Speculative rating with a price target of C$19, appreciating the company’s strong fundamental performance in the US.
Just like Apple Inc. (NASDAQ: APPL), Tesla Inc. (NASDAQ: TSLA), Uber Technologies, Inc. (NYSE: UBER), Amazon.com, Inc. (NASDAQ: AMZN) and NVIDIA Corporation (NASDAQ: NVDA), Cresco Labs Inc. (OTC: CRLBF) is attracting investor attention because of its long-term growth.
Brookfield Infrastructure Partners (BIP)
Source: Shutterstock
- 52-week range: $42.29 – $58.58
- Dividend Yield: 3.64%
Brookfield Infrastructure Partners is a master limited partnership (MLP) that owns and operates long-life infrastructure assets that generate stable cash flows. It focuses on acquiring infrastructure assets that have low maintenance capital costs and high barriers to entry.
Brookfield released second-quarter results in early August. Revenue increased 36% YOY to $2.7 billion. The company reported net income of $352 million, or 61 cents per diluted share, compared to a net loss of $61 million, or 25 cents loss per diluted share, in the prior-year quarter. Funds from operations of $394 million reflects an 18% YOY increase. Cash and equivalents ended the period at $1.28 billion.
On the results, CEO Sam Pollock remarked, “Our base business generated strong results in the second quarter, benefiting from the ongoing economic recovery. The recent completion of several large capital recycling initiatives has provided enhanced liquidity to support our robust pipeline of new investments.”
BIP owns water, energy, utility, transportation, and communications infrastructure worldwide. These assets offer essential services that are hard to replicate and generate a stable and recession-proof stream of cash flow.
For investors who prefer to avoid partnership taxes, the firm split its shares to launch Brookfield Infrastructure (NYSE:BIPC). BIPC shares provide an equivalent economic return to BIP shares.
BIP stock offers a dividend yield above 3.6% and is around $56, up 13% year-to-date (YTD). The stock looks cheap, currently trading at 1.6x trailing sales. Given its investment-grade credit rating, Brookfield Infrastructure is an attractive long-term opportunity for income investors.
Amazon.com Inc. (AMZN)
If the second-biggest name in e-commerce is good enough to make the best growth stocks list, why not also include the best in class? Not only is Amazon‘s scale unmatched – the company is hiring 150,000 workers just to meet demands for the holiday season – but it’s got an entirely distinct segment of its business differentiating it from the consumer-focused retail space. Amazon Web Services, the company’s cloud computing arm, is probably the single most valuable segment of Amazon’s empire, and certainly is the most profitable. At this point, it’s vital to the global economic infrastructure, with many of the world’s largest corporations, including illustrious financial institutions and U.S. military operations, heavily reliant on AWS. Despite accounting for just 12.8% of revenue in the first half of 2021, AWS hauled in 50.4% of the company’s operating income.
The Valens Company Inc. (OTC:VLNCF)
No. of Hedge Fund Holders: N/A
The Valens Company Inc. (OTC: VLNCF) is a certified provider of cannabis extraction, purification, formulation, and manufacturing services based in Canada. The company is tenth on our list of 11 best stocks for long term growth.
On June 24, investment advisory Desjardins kept a Buy rating on Valens (OCT: VLNC) stock and increased the price target to C$4.25 from C$3.75 as reported by its analyst John Chu.
In recent months, The Valens Company Inc. (OTC: VLNCF) shares have considerably outpaced the overall cannabis market. In 2021, the stock increased by more than 50%. The company reported revenue of $17.5 million at the end of the second quarter, up 9.2% from the same quarter previous year. At the end of the second quarter of 2021, the company’s balance sheet looked good with $51.9 million in cash, cash equivalents, and short-term deposits and no debt.
The Valens Company Inc. (OTC: VLNCF) diversified extraction operation will scale with the market, allowing it to provide a wide range of oil-based product, which will drive aggregate cannabis growth while flower-based product demand declines. The company’s revenue mix is shifting due to the shift to Cannabis 2.0 and the increase of derivative products. The business is expanding its production capabilities and focusing on the white label sector.
Chevron (CVX)
Source: Denis Kuvaev / Shutterstock.com
- 52-week range: $65.16 – $113.11
- Dividend Yield: 5%
San Ramon, California-based Chevron is one of the most important oil majors with global exploration, production, and refining operations.
Chevron issued Q2 results in late July. Total revenue came in at $36 billion, up from $16 billion in the year-ago period. Adjusted earnings were $3.3 billion, or $1.71 per diluted share. A year ago, it reported an adjusted loss of $2.9 billion, or $1.56 per diluted share. Free cash flow for the quarter stood at $5.2 billion.
CEO Mike Wirth cited, “Second quarter earnings were strong, reflecting improved market conditions, combined with transformation benefits and merger synergies. Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending.”
Chevron is a diversified oil company with solid fundamentals that offers a safe way to capitalize on a sustained oil and gas boom. While the company faces long-term headwinds due to the global transition toward green energy sources, economies around the world still predominantly rely on fossil fuels.
In 2020, Chevron purchased Noble Energy. The acquisition provides the company with low-cost, proven reserves and undeveloped resources that promise to enhance an already robust upstream portfolio.
CVX stock hovers at $107, up 27% YTD. It is trading at 14x forward earnings and 1.8x sales. Given the 5% dividend yield and leading market position, Chevron is a compelling stock for long-term income investors seeking exposure to high oil and gas prices.
Conclusion:
Wondering how to select the best stocks to buy for the next five years? A lot of companies dream about turning into one of these listed growth stocks, but it takes both product innovation and market demand to create a dominant company.