After the grueling financial instability brought about by COVID-19, the top stocks for 2020 are for those that thrive and grow during the major lockdowns and restrictions.
However, financial analysts anticipated that the best stocks to invest in in 2021 are for industries that will significantly benefit from the healing and back to normalcy economy. Investors are looking for primed stocks that are ready to surge and sustain robust profit in the current recovering economy.
If you are looking for some ideas on where you can invest your hard-earned money and strengthen your investment portfolio, we have rounded up 10 of the best stocks to consider in 2021 to help you.
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10 Stocks to Invest in 2021
1. CrowdStrike Holdings Inc.
Crowdstrike, as a cybersecurity company, is right in the middle of a fast-growing and transformative industry. As the world is rapidly transitioning, all transactions online need data security and protection, and CrowdStrike’s service has never been this relevant.
The company is recognized as an industry leader when it comes to endpoint protection solutions for various organizations. Its superior product that provides protection from security breaches and cyberattacks has achieved great success in the past years. Customer retention is at 98%, with 64% of clients who purchase their cloud module subscriptions.
CrowdStrike was founded in 2011 by George Kurtz in Sunnyvale, California, and became a publicly-traded company in June 2019 (CRWD).
Why Buy CRWD?
CrowdStrike has enjoyed considerable growth in 2020 and is expected to continuously advance because more and more people are keen on purchasing IT security software to manage and protect their data.
Its Falcon platform that provides endpoint security, security and IT operations, threat intelligence, and cloud security has an impressive adoption rate. The strong stock performance of the company is evident in its $874.4 million revenue in 2020, with a notable 82% over-the-year increase.
The steady customer growth reflects the company’s continual increase in revenue even though it is more expensive than McAfee and its other rivals. Further, there is a notable decrease in the company’s net losses from $35.5 million to $24.5 million, which is an excellent sign of increasing financial stability.
With the recent cybersecurity attacks, there is a rapidly increasing demand for information security solutions. It won’t be surprising if CRWD continues to surge.
2. Tyler Technologies
Saas stocks are one of those who benefited and took a significant surge during the pandemic. This apparent shift in buying tech stocks is an excellent way to increase wealth and boost investment portfolios.
Tyler Technologies offers a promising prospect if you are looking for new yet rising tech stock to invest in. The growth in SaaS services has been amped up by the global pandemic, thanks to the physical distancing restrictions. It is a software as a service (SaaS) company that provides government institutions and schools with the best technology to operate with the help of their software services efficiently.
Since its founding in 1999, the company has continually enhanced its products and services that keep up with the latest technology advancements. As a company with a wide breadth of products in the industry, it has maintained its industry leader status.
Why Buy TYL?
Government and academic institutions were forced to work or study from home, and this setup requires a reliable software service to work.
This shift in educational and work arrangements is here to stay. The government allocated a $350 billion Federal fund for state and local governments to address the need to revamp the old IT and software infrastructure; this is where Tyler Technologies comes in.
Last April 2021, TYL announced that it had completed the acquisition of NIC, a government payments and solutions provider. This move is expected to increase revenue and help stabilize its position as a trusted software provider.
Other than that, the company expects to earn an annual compound growth rate of 7-8 percent through 2022.
3. Alphabet Inc
Alphabet Inc is a multinational conglomerate company created after Google’s restructuring in 2015. It is the parent company of Google and its other subsidiaries. Despite the reorganization, the company kept its original ticker GOOG because Google is still its primary source of revenue.
Google remains to be the largest search engine with the company’s major source of revenue in digital advertising. And as mobile slowly overtakes desktop, Google’s Android operating system has become a dominant player.
Moreover, Google Services is also expanding with YouTube, Gmail, Google Play, Google Home smart speakers, Nest, and Pixel phones adding up to Alphabet’s bottom line. Not to mention Google Cloud, which is also an essential revenue source for the company.
In other words, Alphabet is one of the largest companies in the US and is ranked 9th among the Fortune 500 companies.
Why Buy GOOG?
Even after the decrease in online advertising because of the pandemic, GOOG has bounced back and brought $56.9 billion in revenue. As the world’s most preferred search engine, it controls more than 88% of US users and 98% of the global market.
YouTube, another of its subsidiaries, has also gained traction during the pandemic as one with the most consumed content. YouTube’s advertising revenue has an impressive increase 0f 46% from the previous year.
With this in mind, Alphabet holds a tremendous competitive advantage against its competitors. The vast web of Alphabet’s revenue stream has made the company one of the most sought investments.
4. Alibaba Group
Alibaba, the Chinese e-commerce and retailer giant, has successfully positioned itself as the world’s biggest online commerce company. Originally founded as an online venue for small businesses to sell products, Alibaba has since expanded and became one of the world’s business titans. The company has then ventured into different industries.
However, e-commerce remains its most significant source of revenue which generates profits seven times more than its rivals. The intense scrutiny of the US and Chinese governments did not affect the company’s standing in the stock market.
Aside from e-commerce, Alibaba has also ventured into cloud computing, entertainment, fintech, and a streaming platform.
Why Buy BABA?
BABA has an imposing track record making it one of the safest stocks to invest in. Although the Chinese government’s antitrust crackdown resulted in BABA stocks decreasing by 2.6% during the first quarter of 2020, Alibaba’s revenue soared by 37% at the end of 2020.
The company’s revenue has tripled in the past three years, and stock is booming with the potential to be one of the best stocks to buy this year. Also, Alibaba’s cloud computing business is also expected to grow strong and expand this year. It has seen notable growth of 50% every year since it started.
The company has a good record of growth with a sales growth of 46% and an earnings growth rate of 29% in the past five years.
5. Amazon
As one of America’s largest companies in revenue, Amazon is also among the Big Four tech companies alongside Apple, Microsoft, and Google.
Amazon is the best choice for average stockholders. It is considered a smart stock because most US consumers know that it is the best e-commerce company. Aside from retail, the company also positions itself as a pioneer in the cloud infrastructure business. This powerful combination of cloud and retail has successfully increased Amazon’s market cap to around $1.6 trillion.
Amazon’s sales and profits have been surging despite the global pandemic since almost everyone is shopping online for both discretionary and essential products. The company showed resilience by continually delivering quality service and products despite the challenges faced by the company’s logistics during travel restrictions.
Why Buy AMZN?
Because people were afraid to go outside to shop, the company started in 2020 with over 150 million Prime members and is expected to grow bigger in 2021. This retail and cloud services behemoth has seen a 38% increase in revenue in 2020 amidst the global pandemic, with $386 billion in revenue.
Amazon’s Web Services is also thriving, making it its profit powerhouse other than its retail arm. AWS has a surging growth rate of 29.8% in just one year.
The first quarter of 2021 has been a good start for Amazon. It expects a net sales increase of 24% to 30% by the end of the year. The rising revenue is a good indicator that AMZN will continue to yield higher returns by the end of 2021 and the years to come.
6. PayPal Holdings
Investors and financial experts consider PayPal as among the top stocks to invest in this year. As a leading digital payment platform with more than 377 million active users in more than 200 markets worldwide, PayPal has seen stellar growth in the past years.
As business transactions are slowly transitioning to online transactions, PayPal as a provider of simple and quick online money transactions has never been this valuable.
While there are other online payment options, PayPal offers additional benefits that others don’t. To begin, it has been in the industry for more than a decade, making it the most widely accepted payment option anywhere in the world. Second, transactions are secure and fully protected with additional security layers to ensure that information is protected.
Financial analysis and reports show that the company’s earnings demonstrate robust long-term growth. Further, the current financial standing of PayPal is in a good position, making it an attractive investment.
Why Buy PYPL?
PayPal has a recorded compound annual growth rate of 16% in the past five years. The company started in 2015 with 181 million accounts and ended 2020 with 377 million active users. The company is also expected to have more than 750 million account holders by 2025. This number is clear evidence of the shift in consumer-paying behaviors that keep up with the world’s economic climate.
PayPal ranked in the 78th place of Fortune’s list of 100 fastest-growing companies, a great reference point for companies that deliver the best results to their investors.
7. Hilton Worldwide Holdings
COVID-19 has dramatically affected the tourism and travel industry. There is no denying that this has a significant negative impact on Hilton. It was reported that the year 2020 had seen a 50% decline in sales and a 64% drop in earnings. Hilton’s revenue per room is at $102 in 2019 and is at $47 by 2020.
Formerly Hilton Hotels Corporation, Hilton Worldwide Holdings is an American hospitality company with a broad portfolio of resorts and hotels worldwide. As the world’s largest hotel and lodging empire, it boasts a massive 972,000 properties operating in about 120 countries.
In 2013, Hilton became a public company and had enjoyed a steady and robust financial performance over the years. Pre-pandemic, the company’s net income grew by 15% because of its $886 million increase in revenue. Hilton ended 2019 with a $630 million revenue from its operation and investing and financing activities.
Why Buy HLT?
With a cash pot of $3.5 billion, Wall Street analysts expect Hilton to gain solid ground in 2021 as hospitality demands pick up as the pandemic restrictions start to ease out. Travel is expected to bounce back, and demand for vacations and leisure activities is beginning to be felt by the hospitality industry.
The company’s stable finance puts them in a good position to recover. Despite being in the middle of a global pandemic, the company never halted its expansion efforts, allowing them to attain a net unit growth of 56,000 additional rooms in 410 new hotels.
8. Tesla
Tesla is a great stock option for those who want long-term investments. It is currently among the Nasdaq 100 list and S&P 500 index with over $650 billion market cap. As a highly valued global car manufacturer, Tesla is fast accelerating to supply the demand for electric cars as a sustainable energy solution.
Tesla’s electric cars are more expensive compared to hybrid and traditional vehicles. However, Tesla cannot keep up with the high demand, resulting in a waitlist for backorders.
TSLA is considered the most controversial stock because it can dip or surge whenever its billionaire CEO Elon Musk tweets something about the company.
Why Buy TSLA?
The massive expansion of Tesla’s manufacturing capabilities is expected to strengthen TSLA. Musk wants to double the current production in the next ten years to keep up with the demand.
Although TSL is pricey, as of April 2021, it has gained more than 400% in the past 12 months. This increase in numbers means that investors believe that Tesla is more than a car company.
Owning a market cap of around $600 billion, Tesla is way ahead of its top competitors.
9. Castle Biosciences
Wall Street analysts are betting big on health care, and Castle Biosciences is a closely watched company to bounce back this 2021.
Castle Biosciences is a commercial-stage dermatological diagnostics company that provides personalized genomic information for patient diagnosis and prognosis. The company also develops and confirms diagnostic tests and technologies to treat cancer. They also have active research programs to test dermatologic diseases with high clinical needs.
Headquartered in Texas, Castle Biosciences was founded in 2008 and became a public company last July 2019.
Why Buy CSTL?
Although several signals indicate a recent drop in the value of CSTL, financial experts are pretty optimistic that stock may trend higher in the coming months and recover before the end of the year.
The company’s total revenue is $17.3 million, which is above the $15.7 consensus estimates. This revenue growth is attributed to consumers’ desire to have a gene profile test, especially for cancer-related procedures.
Finance analysts calculate that although CSTL will not be among the popular stocks among hedge funds in the 3rd quarter of the year, there is a big possibility that CSTL will be higher in the months to come.
10.Verizon Communications
Verizon is an outstanding stock to buy for safe and income-oriented investors. Although Verizon has underperformed during the past years, a good investor knows that past performance is not the only indicator to predict future reliable gains. Many experts believe that Verizon is still worth buying.
Verizon Communications is America’s largest multinational telecommunications company. Formed in 1983, the company soon became the leading provider for technology, communications, entertainment, and information.
Headquartered in New York City, Verizon became a publicly owned company on July 3, 2000.
Why Buy VZ?
VZ is the top bidder in a recent government auction for a mid-band radio spectrum for better communications. This is expected to result in Verizon’s increase in consumers. Plus, they are also upgrading their current plan to an unlimited monthly data plan.
The company is also fixing its broadband service to reach 30 million homes by the end of 2023. Verizon is spending $10 billion to build more 5G wireless networks in the next three years.
These are among the reasons why many investors are still buying VZ as clear proof for potential revenue increase in the years to come.
Final Thoughts
Becoming a successful investor requires research and experience. Parking your money in high dividend stocks is the ideal scenario. However, a sure gain is not always guaranteed.
That being said, you now have an idea of the top stocks to invest in this year. You are free to heed our advice. We highly recommend you learn more about your stock prospects before finally deciding to buy.
Related: How to invest in stocks
