Investing in growth is difficult. There are many trends that investors should follow when deciding which ones will provide the best growth opportunities. Within these different trends, investors also need to determine which companies dominate their respective industries today and whether various companies will be leaders in the future. Shopify (TSX: SHOP) (NYSE: SHOP) and WELL Health Technologies (TSX: WELL) are two leaders in their respective industries. Which stock is the best to buy today?
Which industry has more room for growth?
The e-commerce industry is very exciting. Consumers have slowly embraced online retailing over the past two decades, but global penetration has really hit a new level in the past two years. In 2020, the COVID-19 pandemic pushed physical retailers to close their doors, pushing more consumers to online stores.
In Canada, online retail accounted for about 10% of all retail sales in 2020. Meanwhile, in other regions like the UK, e-commerce accounted for almost 40% of all sales in Canada. detail. There is much more room for this industry in Canada and other countries around the world.
The telehealth industry could be just as intriguing. From 2021 to 2026, the telehealth industry is expected to grow at a compound annual growth rate of 26.5%. This means that the companies that help move this industry forward could experience massive growth.
We’ve seen how quickly companies like WELL Health and Teladoc were able to grow in just one year. The downside to investing in telehealth stocks is that it may take longer for it to really change healthcare visits globally. This means that while these stocks may experience strong growth, it may take longer to see an inflection point in this industry and massive gains in these stocks.
Advantage: e-commerce, Shopify.
Business management assessment
The management team at Shopify is very impressive. Its CEO Tobi Lütke founded the company and is even the person who wrote the very first line of code for what would become the Shopify platform. He is highly regarded in the company, with a 90% approval rating on Glassdoor. Lütke has previously said he asks his board every year if he still thinks he is the best person for the job. If ever the answer is nohe would be happy to step aside and let someone else run the business.
To add to the Shopify argument, investors need to know about Harley Finkelstein. A true example of entrepreneurship, he has experience as a trader, running a t-shirt business to help fund law school tuition. Finkelstein eventually joined Shopify and became the main platform office for the company, then its COO. In September 2020, he was elevated to his current role as President of Shopify.
WELL Health CEO Hamed Shahbazi is an excellent leader, with over 20 years of experience as a technology-driven operator. Prior to joining WELL Health, he founded TIO Networks, which eventually grew into a multi-channel payment solutions provider.
In 2017, TIO was acquired by Pay Pal for $ 304 million. With extensive experience in mergers, acquisitions and divestitures, Shahbazi is the perfect man for the job following WELL Health’s growth plan.
Edge: While Shahbazi is certainly a senior executive, it’s hard to bet against Shopify’s one-two punch of Lütke and Finkelstein.
One-to-one business performance
When it comes to business performance, Shopify is perhaps one of the most impressive stocks in the world. In terms of quarterly revenue, Shopify saw year-over-year increases of 110% and 57% in Q1 and Q2 2021 respectively. From 2019 to 2020, Shopify’s annual revenue grew by 86%. These numbers were reflected in the stock market performance of Shopify, which has gained 93.6% per year on average since its IPO.
WELL Health has yet to report second quarter earnings. However, for the first quarter, the company reported that its quarterly revenue grew 150% year over year. This growth was driven by a 345% increase in its software and services revenues. Before registering on the TSX, WELL Health was appointed to TSXV 50 for three years. This is a list of the 50 best performing stocks on the TSXV.
Edge: Same. Both companies are experiencing remarkable growth and have a history of strong growth.
The Shopify vs. WELL Health: what is the best buy? first appeared on The Motley Fool Canada.
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Foolish contributor Jed Lloren owns shares of Shopify and Teladoc Health. The Motley Fool owns stock and recommends PayPal Holdings, Shopify, and Teladoc Health. The Motley Fool recommends the following options: $ 75 long calls in January 2022 on PayPal Holdings, $ 1,140 long calls in January 2023 on Shopify, and $ 1,160 short calls in January 2023 on Shopify.
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