It is not that difficult to double your money – if you have enough time. Even with a tiny growth rate, you can double your money in hundreds or thousands of years. When it comes to stocks, even one that grows 4% a year will more than double in 20 years. But you probably clicked on this article in search of producers faster than that, right?
Here are three companies that can double your money – potentially in just a few short years. See if any of them interest you as a candidate for your long-term portfolio.
Image source: Getty Images.
1. General Electric
General electrical (NYSE: GE) has undergone a transformation in recent years, selling its home appliance business, breaking up its consumer credit card operations (as Financial Synchrony), and focusing mainly on its aviation, health and energy operations. Still, the pandemic was a blow, with much of its business slowing or stopping and total revenue for 2020 fell 16% year on year. But the company has consistently paid off its debts and sees better days ahead, as more orders for aviation products arrive due to the fall of the pandemic and requests for renewable energy offers, such as wind turbines, are also starting to arrive.
GE President and CEO Larry Culp summarized the company’s year by saying: “As 2020 progressed, we significantly improved GE’s profitability and cash performance, despite a still difficult macro environment. The fourth quarter marked a strong free cash flow ending in a challenging year, reflecting the results of better operations, as well as strong and better orders in Energy and Renewable Energy. “
General Electric had long been paying significant dividends, but reduced its payout by 90% a few years ago when it was struggling. It has been growing slowly again, and its dividends have recently yielded 0.34%. If your free cash flow remains solid and continues to grow, it will come as no surprise to see significant dividend increases ahead. This, together with the appreciation of the share price, should help the shares to double the investors’ money.
2. Pinterest
Pinterest (NYSE: PINS) the shares rose more than 250% in 2020 and recently exhibited a price / profit (P / E) ratio reaching 200. So, yes, this stock was quoted in high expectations. So it may not double in the near future – but its long-term future looks very promising. The company’s platform allows users to share visual inspirations for food, fashions, styles, crafts, home decor and more. There are many of these users as well – more than 450 million, in fact, who use the site at least once a month. Altogether, users saved about 300 billion “pins”.
The company has an excellent business model, as it is light: the site already exists and costs relatively little to support many more users. He’s profiting from digital advertising on his website and, unlike many other sites, where users find ads annoying, on Pinterest users are looking for ideas that many ads offer. If they have fixed too many home decor items, they are likely to be more receptive to advertisements for home decor items.
In the last quarter of Pinterest, its revenue increased 76% year on year, with net profit growing 682%. You can’t expect these growth rates to continue for long, but the company projects a 70% growth rate over the previous year for revenue in the next quarter. These growth rates can make a steep P / E ratio more palatable – especially for long-term investors. This is a very promising company with a bright future. If Pinterest is able to further monetize its huge user base, it can be a powerful catalyst for further growth.
3. Zynga
Specialist in mobile video games Zynga (NASDAQ: ZNGA) is another company with a good chance of doubling in value in a few years. You may be familiar with some of its offerings: Words with friends, Zynga Poker, CSR Racing, Empires and puzzles, Toon Blast, Toy explosion, Merge Dragons, and Merge Magic.
Zynga recently reported a strong year of 2020, with revenue growing 49% year over year and operating cash flow growing 63%, and cash and investments reaching $ 1.5 billion. The company is already acquiring other businesses with existing game franchises and that lot of money can finance new purchases. The company is looking to Asia to boost its revenues and revenues, and also aims to increase game purchases by players.
Like Pinterest, Zynga’s shares may not look cheap, but the company’s prospective P / E ratio was only in the 30s recently, and its recent price / sales ratio close to six was only about 36% higher than its average of five years. Conservative investors can look for shares that are more clearly devalued than Pinterest and Zynga, but risk-tolerant investors can justify premium prices with rapid growth rates.
A little time researching online can reveal many more portfolio candidates, capable of doubling in value over a few years. You may also want to delve into one or more of these three companies.