Top 5 Growth Stocks That Can Beat the S&P 500

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Investors who aim to bet the broader indexes such as the S&P 500 need to create a portfolio of growth stocks. Generally, growth stocks have the ability to increase revenue and earnings at a faster pace allowing them to generate outsized returns over the long term. Here, we look at five such companies that can crush the S&P 500 over the upcoming decade.

3Etsy

The e-commerce vertical has been immune to COVID-19. In fact, the pandemic has acted as a tailwind for online shopping platforms including Etsy. The company increased its sales from $604 million in 2018 to $818 million in 2019. It more than doubled to $1.72 billion in 2020.

The gross merchandise sales on the Etsy platform grew 107% year over year to $10.3 billion in 2020, making it the fourth-largest e-commerce platform in the U.S.

Etsy’s active buyers have grown at an annual rate of 33% to reach 4.7 million in Q1 of 2021, up from two million in Q1 of 2018 while the number of active sellers has grown by 38% to 90 million in this period. This has allowed Etsy to report $2 billion in sales in the last 12-months, up from $465 million in the twelve months prior to Q1 of 2018.

Etsy has estimated its total addressable market to grow to $437 billion by 2023 which means it currently accounts for less than 1% of the total market, making it a solid bet right now.

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Aditya Raghunath has close to seven years of experience in covering publicly-listed companies. With a post-graduate degree in finance, Aditya aims to educate and engage investors by writing extensively about growth, dividend, and value stocks. If you are considering investing in the stock market, he recommends reading The Intelligent Investor by Benjamin Graham before taking the plunge.

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