You can hold 20 different stocks in your portfolio, but to get rich all you need is some of those stocks to become multibaggers in the years to come. In other words, think about growth stocks that could potentially be unstoppable if they can make the most of the opportunities ahead. In ten years or so, these actions could increase your wealth exponentially.
Here are three of those growth stocks with explosive potential over the next decade and beyond, each on an unmistakable megatrend.
The power of dividends in clean energy
You’d be hard-pressed to find a renewable energy security on a growth stock list, but Brookfield Renewable Power (NYSE: BEP)(NYSE: BEPC) has just about all the characteristics that a stock with exponential growth potential should have: size, a huge addressable market, and an underlying secular trend that is changing the world. Let me explain.
Brookfield Renewable is one of the world’s largest and most diverse pure renewable stocks, with operations on four continents in hydropower, wind and solar. Its size and scale means the company already has a massive presence in the industry and will be difficult to move. While the International Energy Agency predicts that renewables will account for a third of the world’s electricity by 2025, Brookfield Renewable potentially sits in a trillion dollar market.
Image source: Getty Images.
Already, Brookfield Renewable has 31 gigawatts (GW) of assets under development, compared to 20 GW of assets currently in operation. This should be reflected in the company’s turnover in the years to come.
In fact, Brookfield Renewable has already given a glimpse of what to expect in the medium term: it expects its funds from operations (FFO) per share to grow by 6% to 11% organically. through 2025, with a further 9% growth potential if the company can find significant acquisition opportunities in between. It also means that Brookfield Renewable could comfortably reward shareholders with dividend increases of 5% to 9% each year, even without inorganic growth, which could potentially represent a lot of returns for shareholders over the next decade, as per the past.
Not just any other e-commerce stock
Shopify‘s (NYSE: SHOP) The platform gives virtually anyone the ability to start and run a business online, with end-to-end management from inventory to payments to sales channels. Shopify wants to make it easier to create and manage an online store. As simple as it may sound, this is a really powerful concept that strives to empower people, entrepreneurs and small businesses in particular, this is where the potential for business growth lies, especially in an increasingly digital world in the wake of the COVID-19 pandemic.
Shopify’s revenue broke the $ 1 billion mark for the first time in a quarter, and its gross merchandise volumes reached $ 42.2 billion. Importantly, the company also achieved second quarter net income of $ 879.1 million. Shopify’s popularity in the United States is already growing rapidly, and it is only a matter of time before the company establishes itself as a major e-commerce player in international markets. Shopify Markets, a platform that allows merchants to sell globally, is just one of the many moves Shopify is taking to expand internationally.
The best part is that Shopify is already profitable and has a strong balance sheet, with low debt and high cash flow, which is unheard of in growing businesses, especially in an industry like ecommerce. It’s also a business run by a founder, which improves Shopify’s chances of long-term success. Ultimately, the success of Shopify will be the success of every shareholder.
Revolutionize a critical industry
Holdings reached (NASDAQ: UPST) stocks have a foamy valuation of 60 times sales right now, but that’s how growth stocks behave. Upstart is actually growing its revenue at breakneck speed: its revenue jumped 1,018% in the second quarter, helping the company to make a profit compared to a loss during the period. last year. Upstart is obviously attracting more banks and customers given the 1,600% jump in loans issued on its platform in the second quarter.
This might just be the start, as Upstart expands into newer and larger markets.
Instead of the traditional FICO credit score, Upstart uses artificial intelligence (AI) to filter borrowers based on more than 1,500 data points, and therefore helps partner banks create low-risk loans while providing borrowers with access to fast and affordable credit. Notably, 71% of all loans in its second quarter were automated and approved instantly.
Most of them were unsecured personal loans, which has been Upstart’s focus so far. But now the company is aggressively expanding into auto refinancing, which is expected to be its main catalyst for growth. This is a $ 635 billion market, based on total auto loan origination in the United States between Q2 2020 and Q1 2021. On October 6, Upstart launched auto loans on its Upstart Auto Retail tool that helps franchise dealers of the best automotive brands sell new and used cars. cars. Over $ 1 billion worth of vehicles were sold by Auto Retail in the second quarter alone.
With Upstart also eyeing markets like credit cards, mortgages, long-term student loans and the already profitable business, there could be no stopping this growth stock over the next decade and beyond. of the.
This article represents the opinion of the author, who may disagree with the “official†recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
