Adding to your winners, even just $500, can be a great way to juice your portfolio returns over the long run. Companies that have strong stock appreciation can often continue that momentum for years, even decades.
We asked three Motley Fool contributors to pick one company that they’d have no hesitation to add to today. They picked PayPal (NASDAQ:PYPL), Qualcomm (NASDAQ:QCOM), and Twilio (NYSE:TWLO).
PayPal: It’s still early innings for the digital payments revolution
Danny Vena (PayPal): In the realm of digital payments, PayPal was the pioneer that started it all. The company made e-commerce practical by introducing an online payment system to the masses — which is still widely used today — as well as having bragging rights to the first widely used digital wallet.
Since the company’s much-publicized divorce from eBay in 2015, PayPal has made a host of moves to expand its existing business, partnering with the biggest banks and credit card issuers in the industry to ensure that its customers can use any payment method at their disposal without ever leaving the PayPal app.
Then there’s the emerging peer-to-peer (P2P) payment systems space, and no discussion about the most popular entrants would be complete without a nod to PayPal’s Venmo. The app, which began as a way to send money to friends or split a bill at a restaurant, has evolved to represent a growing digital payments platform that can also now be used to pay retailers and other merchants.
Many investors have classified PayPal as a COVID-19 play, linking the company’s growth to the onset of the pandemic, but history proves otherwise. In 2019, before the pandemic, PayPal delivered a record-setting year across many metrics, including revenue, net income, and operating margin.
That said, there’s little doubt the pandemic accelerated an already robust trend toward touchless payments and digital wallets, a space that PayPal absolutely dominates. The company saw the opportunity and pounced.
Last year, PayPal built on its record 2019 by delivering the strongest performance in the company’s history. It added a whopping 72.7 million net new active accounts, which pushed its total payment volume (TPV) of $936 billion up 31%. These strong fundamentals resulted in revenue that grew to more than $21 billion, up 21%, and generated profits that grew 71%.
If you think PayPal’s growth engine is out of gas, think again. During the second quarter, the company added 11.4 million new accounts, which in turn drove TPV of $311 billion, up 40% year over year. This translated to net revenue of $6.24 billion, up 19%, and adjusted profits that climbed 8%. Not bad, considering the tough comps PayPal faced in the wake of its back-to-back record-setting years.
Financial technology and digital payments are only just getting started, and…
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