20 Nov 3 Growth Stocks You Should Not Miss Out On
As a Smart Investor, our job is to find companies that can grow through adversity.
The hallmark of a growth company is a strong and recognisable brand name, a sturdy competitive moat and the ability to evolve and latch on to new trends.
Of course, finding a good stock is easier said than done.
While many businesses may tout their resilience during crises, not many can lay claim to having weathered them successfully.
And the current pandemic is no walk in the park.
So imagine my surprise when I managed to uncover a bunch of stocks that displayed excellent growth prospects despite the COVID-19 pandemic.
Here are three more companies that have displayed impressive growth this year, and that you may wish to consider adding to your watchlist.
Match Group (NASDAQ: MTCH)
Match Group is a leading provider of dating services with a portfolio of brands such as Tinder, Match, Meetic and PlentyOfFish.
The company has around 10.8 million subscribers and its dating apps are available in 40 languages.
For its third-quarter earnings release, Match reported that its revenue climbed 18% year on year to US$639.8 million.
Net profit attributable to shareholders jumped by 22% year on year to US$132.1 million.
The business also generated strong free cash flow of US$486.5 million for the first nine months of 2020.
On the operations side, average subscribers rose by 12% year on year, while average revenue per user (ARPU) inched up 4% year on year to US$0.62.
Match has grown its quarterly revenue at a 23% compounded annual growth rate over the last five years. As of the third quarter of 2020, its Tinder app now takes up more than 50% of total revenue.
The company had just completed a separation from parent company IAC (NASDAQ: IAC), a holding company that owns mostly media and internet brands across 100 countries.
Beyond Meat (NASDAQ: BYND)
With the health trend that’s been sweeping across the world in the last few years, Beyond Meat has positioned itself favourably to ride on this tailwind.
The company is a leading plant-based meat manufacturer, with a portfolio of products that are free from hormones, cholesterol and antibiotics, all the while offering the same taste and texture as actual meat products.
Beyond Meat has grown its revenue by 53% year on year for the first nine months of 2020, driven by strong growth in the retail segment as more people buy from supermarkets as they go through lockdowns and movement restrictions.
The foodservice division, however, saw a marked slowdown in the third quarter as COVID-19 impacted foodservice demand levels.
The company has not broken even yet as it is still spending aggressively on marketing and staff costs.
However, Beyond Meat is rapidly expanding its product portfolio and will introduce its next iteration of the Beyond Burger in early 2021.
The company has already begun selling its new Beyond Breakfast Sausage Links in grocery stores in the US and had recently inked a deal to triple the distribution of the Beyond Burger to more than 2,400 Walmart (NYSE: WMT) stores nationwide.
Domino’s Pizza (NASDAQ: DPZ)
Domino’s Pizza is the world’s number one pizza brand in the global quick-service restaurant (QSR) sector.
With a total of more than 17,250 stores around the world as at 6 September 2020, Domino’s is present in more than 90 markets and follows a franchising model where 98% of its stores are run by franchisees.
In its third-quarter earnings report, the company announced an 18% year on year growth to total revenue of US$967.7 million.
Net profit grew by 14.8% year on year to US$99.1 million.
Free cash flow for the first nine months rose by more than 13% year on year to hit US$319.2 million.
The pandemic has caused more people to stay at home and order in, thereby boosting overall sales for the business.
Most impressively, Domino’s has enjoyed 107 consecutive quarters of same-store-sales (SSS) growth for its international division, while its US division has seen 38 consecutive quarters of SSS growth.
The company believes it has the potential for further growth in the fragmented QSR pizza industry, as the top four pizza chains in the US take up 47% of the total market share.
Internationally, the global QSR pizza industry is growing at a steady rate of 3% to 6% per annum, and the top four players make up just 32% of the total pie.
Domino’s currently has 6,239 stores in the US and around 11,000 stores internationally.
It sees an opportunity to grow its US store count to 8,000 in the future, while there is a potential to open an additional 5,200 in its top 15 international markets.
If you want to find more growth stocks, check out my colleague Charlotte’s list of businesses that should continue to do well post-crisis.
As an investor, you might wonder what the future holds for the REITs in your portfolio. Or how to select REITs that can make you money as Singapore’s economy struggles to recover from the pandemic.
Download your FREE special REITs report: “How You Can Make Money Investing In REITs As Singapore Recovers” HERE!
Disclaimer: Royston Yang does not own shares in any of the companies mentioned.