As many countries continue to battle surges in COVID-19 cases, the White House’s coronavirus advisor Dr. Anthony Fauci warns that the US is likely to see a “surge upon a surge” following the Thanksgiving and Christmas holidays. While hopes surrounding a vaccine rose after Pfizer, Inc. (PFE) and BioNTech SE (BNTX) recently sought emergency approval of their vaccine candidate from the European regulator, the uncertainty created by the pandemic continues to fuel market volatility.
Since some uncertainties still surround the approval of the vaccine and its widespread distribution in 2021, this could be the right time to invest in stocks that have immense upside potential and are expected to outperform in the broader market in the coming days. The Robinhood 100 list contains a number of these strong performing stocks that have had great financial successes over the years. Their presence on the Robinhood 100 list indicates that they are popular for a reason.
As the market leaders in their respective industries, PayPal Holdings, Inc. (PYPL), Visa Inc. (V), Johnson & Johnson (JNJ), and Walmart Inc. (WMT) are sufficiently robust businesses to withstand the market volatility and deliver solid returns.
PayPal Holdings, Inc. (PYPL)
PYPL is a global leader in financial services facilitating online money transfers. The company has seen unprecedented demand amid the pandemic as stay-at-home consumer activity has driven more users to its service. PYPL is expected to witness a substantial rise in digital payments, with rising e-commerce demand in the holiday season.
On October 21st, PYPL announced the launch of a new service that enables its customers to buy, hold and sell cryptocurrency directly from their PayPal accounts. As the migration to digital currency continues to accelerate, the launch will place the company at the forefront of this digital revolution.
On September 23rd, the company announced that it will continue with its expansion of the popular PayPal Business Debit Mastercard with Mastercard Incorporated (MA) to five new European countries. This expansion will drive business growth internationally.
PYPL’s revenue increased 24.7% year-over-year to $5.50 billion for the third quarter ended September 2020. Non-GAAP net income increased 41.7% year-over-year to $1.30 billion, while Non-GAAP EPS grew 40.8% from the year-ago value to $1.07 over this period.
The consensus EPS estimate of $0.99 for the current quarter ending December 2020 represents a 15.1% increase year-over-year. Moreover, PYPL has an impressive earnings-surprise history, with the company beating consensus EPS estimates in three of the trailing four quarters. The consensus revenue of $6.09 billion for the current quarter represents a 22.7% increase from the same period last year. The stock has gained 98.3% year-to-date.
How does PYPL stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Industry Rank
A for Overall POWR Rating.
You cannot ask for better. It is ranked #2 out of 34 stocks in the Consumer Financial Services industry.
Visa Inc. (V)
V, a leading digital payments technology company, has witnessed a rise in digital transactions globally this year. V recently announced a strategic partnership with Conferma Pay to launch Visa Commercial Pay. This collaboration is aimed at helping businesses quickly digitize B2B payments.
On November 21st, the company announced that it had completed the acquisition of YellowPepper, a leading financial start-up in Latin America. This will accelerate V’s implementation of a ‘network-of-networks’ strategy to help support the current and future needs of its clients globally.
V’s data processing revenue increased 4% year-over-year to $2.90 billion in the third quarter ended September 2020. Operating income rose 4.8% sequentially to $3.14 billion over this period.
The consensus EPS estimate of $5.45 for the current year indicates an 8.1% improvement year-over-year. Moreover, V beat the street EPS estimates in three out of trailing four quarters, which is impressive. The consensus revenue of $23.22 billion for the current year indicates a 6.3% increase from the year-ago value. The stock has gained 10.7% year-to-date.
V’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade, Buy & Hold Grade and Industry Rank, and a “B” for Peer Grade. It is also ranked #1 out of 46 stocks in the Consumer Financial Services industry.
Johnson & Johnson (JNJ)
JNJ is one of the leading healthcare companies in the world, operating in the consumer, pharmaceutical, and medical devices sectors. The company’s supply-chain strength could go a long way toward helping the drug maker meet its goal of making and distributing 1 billion doses of its prospective COVID-19 vaccine in 2021, which has resumed phase 3 testing after a brief suspension.
On November 14th, JNJ announced a partnership between its Janssen Pharmaceutical Companies and the Biomedical Advanced Research and Development Authority to support the development of COVID-19 vaccine candidates. JNJ has recently initiated a rolling submission with the European Medicines Agency for its single-dose COVID-19 vaccine candidate. These developments will enable the company to deliver solid performance entering 2021.
JNJ’s sales increased 1.7% year-over-year to $21.10 billion in the third quarter ended September 2020. Net income grew 102.7% from the year-ago value to $3.55 billion, while EPS rose 101.5% from the prior-year quarter to $1.33 over this period.
The consensus EPS estimate of $9 for the next year represents a 12.4% increase year-over-year. Moreover, JNJ has an impressive earnings surprise history, with the company beating consensus EPS estimates in three out of the trailing four quarters. The consensus revenue of $88.80 billion for the next year indicates an 8.5% increase from the same period last year. The stock has gained 2.2% year-to-date.
JNJ’s promising outlook is reflected in its POWR Ratings. It is rated a “Strong Buy” with an “A” for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. It is also ranked #1 out of 240 stocks in the Medical – Pharmaceuticals industry.
Walmart Inc. (WMT)
WMT is a leading retail corporation operating in three groups: Walmart U.S., Walmart International, and Sam's Club. The pandemic has created a huge opportunity for the company to develop its digital presence, after dominating the brick and mortar retail industry. WMT recently launched Walmart+, a membership program with lucrative features like unlimited free delivery, fuel discounts and scan & go--which allows customers to scan purchase items with their mobile phones before they swing by a self-checkout. The launch ahead of the holiday season is likely to better position the retail giant amid competition from Amazon.com, Inc. (AMZN).
On November 12th, WMT announced the launch of Walmart Pet Care and Walmart Pet Insurance to deliver customers pet care programs in one place. As adoption rates soar because of the pandemic, the launch of enhanced pet care services should allow the company to boost its revenue substantially.
WMT’s revenue increased 5.2% year-over-year to $134.70 billion for the third quarter ended October 2020. Operating income grew 22.5% from the year-ago value to $5.80 billion, while EPS rose 56% from the prior-year quarter to $1.81.
The consensus EPS estimate of $1.49 for the current quarter ending January 2021 indicates an 8% increase year-over-year. Moreover, WMT has an impressive earnings-surprise history: it beat the Street EPS estimates in three out of trailing four quarters. The consensus revenue estimate of $147.82 billion for the current quarter represents a 4.3% increase year-over-year. The stock has gained 25.6% year-to-date.
It is no surprise that WMT is rated “Strong Buy” in our POWR Ratings system. It has an “A” for Trade Grade, Buy & Hold Grade and Industry Rank, and a “B” for Peer Grade. Among the 18 stocks in the Grocery/Big Box Retailers industry, it is ranked #1.
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PYPL shares were trading at $216.97 per share on Friday afternoon, up $2.43 (+1.13%). Year-to-date, PYPL has gained 100.58%, versus a 16.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization.4 Best Robinhood Stocks to Buy in December appeared first on StockNews.com