Volatility in the stock markets like the kind we’re witnessing lately can make investors edgy, but such times also generate golden opportunities to invest money and buy stocks. If you can spot stocks with definite growth catalysts today and add them to your portfolio, you could eventually build solid wealth over time. If you have, say, $25,000 on you right now that you won’t need in the near future, consider these five stocks to make that money work for you.
The stock many dumped for no reason
Upstart Holdings ( UPST -1.68% ) shares were battered when growth stocks crashed toward the end of 2021. But with the company’s fundamentals intact, I believed it was only a matter of time before Upstart stock rebounded. The company’s just-released fourth-quarter numbers could well be the inflection point investors have waited for.
Upstart’s numbers reveal how more and more banks and borrowers are flocking to the cloud-based artificial-intelligence-driven lending platform for loans. In its fourth quarter, Upstart’s revenue surged 240% year over year as its partner banks originated loans worth $4.1 billion. Now, you might say that percentage figure is not a fair reflection of Upstart’s growth, as 2020 was a challenging year, but consider that Upstart’s sequential revenue also grew a solid 252% in Q4, and that its outlook points at a trend that’s here to last.
To put some numbers to that, Upstart expects to grow revenue by 65% in 2022 and foresees auto loan transactions worth $1.5 billion on its platform this year. That’s a really impressive number, given that the company has only just entered the U.S. auto loan market. It’s a multibillion-market, though, and Upstart also plans to enter newer markets after personal and auto loans. The opportunities are huge, and if Upstart can deliver, your money on the stock could grow manifold.
With risks comes returns
PayPal Holdings ( PYPL -2.69% ) stock was already on soft ground when a disappointing outlook from the fintech giant in mid-February pushed the stock even farther down the cliff. Yet while PayPal’s challenges have been baked into its stock price, the market is turning a blind eye to its growth opportunities.
For example, PayPal is all set to integrate its money-sharing app, Venmo, with Amazon ( AMZN -1.50% ) which should boost Venmo’s total payment volume (TPV) over time. For perspective, Venmo’s TPV grew 44% to nearly $230 billion in 2021.
Overall, PayPal’s TPV hit $1.25 trillion in 2021 and is expected to touch $1.5 trillion in 2022, which could boost revenue by at least 15%. That means PayPal’s revenue could cross $30 billion in 2022, 20% of which will likely be converted into free cash flow (FCF). The double-digit revenue growth and the strong cash flow generation, especially in an industry where several players are not even profitable yet, are surefire green flags for any investor weighing whether a stock is worth their money. PayPal, in fact, looks poised to grow earnings by double digits for years to come, and that itself should help drive the stock price higher.
Multiply your money with this dividend growth stock
NextEra Energy ( NEE 0.21% ) is the kind of stock you’d want to buy and forget. The renewable-energy stock has dropped sharply this year, but if you believe that clean energy is the future of energy, now’s the time to buy NextEra Energy stock.
For starters, NextEra announced a 10% dividend increase on Feb. 18, in line with the dividend growth goal it set out in 2020. More importantly, NextEra Energy now expects to grow annual dividend by around 10% through 2024. That not only reflects the company’s confidence in its growth but also management’s commitment to shareholders, both of which can play a huge role in the kind of returns the stock can generate over time. We’ve seen that happen wit NextEra Energy stock over the years.
NextEra Energy’s existing assets, which include the largest regulated utility in the U.S. and the world’s largest wind and solar company, are on solid footing. Its pipeline, meanwhile, continues to grow — NextEra Energy’s renewables arm expects to build anything between 23 and 30 gigawatts of capacity between 2021 and 2024 as the world scrambles to decarbonize. That’s huge, and it should ensure steady growth in the company’s earnings, cash flows, and dividends for years to come, which should eventually reflect in the stock price returns.
Electric vehicles are set to rule the roads
Ford ( F -4.45% ) stock stunned the markets in 2021 when it more than doubled, but this could just be the beginning for he company that’s making big moves in the red-hot electric vehicle (EV) space while its flagship F-150 pickup truck continues to outsell in America.
2022 is, in fact, a crucial year for Ford as it starts deliveries of the all-electric version of its F-150 pickup, the F-150 Lightning. Within months of launch, Ford secured more than 200,000 preorders for the F-150 Lightning, even compelling management management to stop accepting more orders by the time 2021 ended. The legacy automaker is now aggressively ramping production capacity to meet demand. In between, Ford has just started shipping its all-electric van, the E-Transit. Ford’s first EV, the Mustang Mach-E, is already raking in solid sales.
With such an impressive EV lineup and Ford’s strong outlook for revenue and FCF for 2022, there’s little that could stop this auto stock from rallying higher. Ford also reinstated its dividend recently, which further reflects management’s confidence in the company’s prospects.
The market is underappreciating this megatrend
Shopify ( SHOP -1.84% ) saw its business boom over the past couple of years or so as COVID-19 mandates forced people to stay indoors and rely on e-commerce for most of their needs. Shopify, on its part, doesn’t just help small businesses set up virtual stores but also offers entrepreneurs an outlet to reach their products and services to the world.
E-commerce, in fact, is a megatrend, and Shopify’s growing merchant base that runs into millions now evidences its popularity. In its just-released earnings report, Shopify reported a 57% jump in 2021 revenue to $4.6 billion, as the company added several partners to offer its merchants better facilities and continued to roll out new products such as a money management product.
The market fears Shopify may not grow as much anymore as the restrictions under the pandemic ease, which explains why the stock has crashed in recent weeks. Yet Shopify should still be able to grow revenue by double-digits percentages and likely even outpace average industry growth, in which case the stock could eventually prove be a big winner if bought around the current price.
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.