These companies have the potential for persistence and growth in multiple market environments.
The bull market is well underway and investors are S&P500. That said, if you want to add quality businesses to your portfolio, continually increasing your position in blue-chip stocks is a smart move. Any market environment. The composition of your portfolio and the performance it produces in different market environments will vary widely depending on your risk preferences, investment objectives, and the types of companies you are generally attracted to.
If you have more spare change (say $5,000) to invest in stocks right now, consider two stocks that can take advantage of the bull market and should be useful in any market environment.
1. Hubspot
hubspot (Hub 1.85%) is a Software-as-a-Service (SaaS) company that provides a variety of services to small and medium-sized businesses. These products include marketing automation software, sales customer relationship management (CRM) software, content management software, and business-to-business (B2B) software.
The company is working hard to incorporate artificial intelligence (AI) mechanisms into its suite of services. These include AI website generators. AI-powered content creation services for emails, blogs, and web pages. Chatbot builder. The AI ​​companion, called ChatSpot, provides solutions such as real-time data and keyword rankings.
Currently, HubSpot has approximately 37% share of the marketing automation software market. This sector is expected to expand by more than 100% from 2023 to the early 2030s, reaching a total value of more than $11 billion worldwide by the end of the forecast period. Effective online strategies and processes are key to enabling businesses of all sizes to grow and remain competitive in today’s digital world, and HubSpot has a large footprint in this space.
In 2023, HubSpot reported total revenue of $2.17 billion, an increase of 25% year over year. The company derives almost all of its revenue from subscriptions. Another small portion of our revenue comes from professional services such as training and consulting solutions. HubSpot’s subscription revenue totaled $2.12 billion last year, a 26% increase from 2022. Professional services and other revenue decreased 16% to approximately $47 million.
The company is not currently profitable under generally accepted accounting principles (GAAP). However, operating cash flow in 2023 increased 29% year over year to $351 million, and the company ended the 12-month period with cash and investments on its balance sheet of approximately $1.7 billion.
Recent reports from jeffries affirmed a Buy rating on the stock while estimating that HubSpot’s annual revenue could reach $5 billion by 2028. Some Wall Street analysts pinpoint the stock’s 12-month upside potential at a median of 15% to 31%. High end. Regardless of what happens to the stock price next year, this company appears to have significant potential left to exploit. That could create a worthwhile purchase proposition for long-term investors. An investment of $5,000 will get you 7.3 shares of HubSpot stock.
2.Costco Wholesale
costco wholesale (Fee 1.25%) continues to report meaningful growth from its proven warehouse club business model. There’s no denying that the global economic backdrop has created an operating environment in which many shoppers’ purse strings are tighter than ever before, and the costs associated with essential spending are increasing consumer dissatisfaction.
Costco’s membership model and global chain of 875 retail stores, where only cardholders can shop, have led to stable revenue and profits during this period. It is increasingly appealing to consumers to be able to pay a relatively affordable annual fee (a basic membership costs just $60) to access a variety of products and services that include large quantities of essentials such as food at low prices. Looks like an option. In this environment.
For Costco, its membership fee model accomplishes multiple goals. The company derives most of its revenue from product sales, but the majority of its profits come from membership fees. These dues as a measure of profit are part of the reason the company is able to sell its products at such low profit margins. Costco also ensures that when a customer enters a store, it usually results in a sale by creating barriers for customers to shop in-store unless they have a membership card.
Its membership model is very fixed, and Costco has an excellent track record of maintaining very high renewal rates. The company had a renewal rate of 92.9% in the United States and Canada (which holds the largest share of warehouse locations) in its fiscal second quarter. Our worldwide membership renewal rate is 90.5%. Costco ended the second quarter with 73.4 million paying household members and 132 million cardholders, an increase of 7.8% and 7.3%, respectively, from the same period last year.
The company also ended the quarter with 33.9 million paid executive members (the top tier with an annual fee of $120). It’s worth pointing out that executive members currently account for over 73% of global sales and 46% of paid members. Net sales totaled $57 billion in the second quarter, up about 6% from a year ago. Costco’s e-commerce site doesn’t require membership to shop, but non-members do have to pay to use it, so net sales rose 18% from a year ago.
Costco’s net income for the quarter was $1.7 billion, up 19% from a year ago, and membership fees were $1.1 billion. Despite its modest yield of less than 1%, Costco has increased its dividend by about 190% over the past 10 years. And stock prices have been particularly strong, leading to lower yields, with shares up 40% compared to a year ago. For investors looking for steady returns and passive income, this familiar name still looks like a solid buy. You can get about 7 shares of Costco stock for a $5,000 investment.
