Growth may seem elusive as the world grapples with the worst pandemic in a century.
However, you’d be surprised to learn that some sectors and companies still demonstrate healthy growth amid the crisis.
There are several reasons for this resilience.
Some companies occupy a dominant market share within their industry and are market leaders, thereby making it easier to withstand downturns.
Others may have a strong online presence that enables them to continue reaching out to customers despite lockdowns and movement restrictions.
Trends that began before the pandemic, such as e-commerce and online payments, have been greatly accelerated as more people telecommute and shift to online modes of communication.
A smart investor should learn to pounce on these quality companies that display strong multi-year growth despite the tough challenges the world is facing.
Here are three growth stocks that could provide fuel for your investment portfolio’s continued growth.
Monster Beverage (NASDAQ: MNST)
Have you ever felt weary and needed a boost of energy to continue working or studying?
Monster Beverage’s range of energy drinks provides exactly that.
The company manufactures and markets a wide range of beverages that include energy drinks, non-carbonated coffee, energy shakes and teas.
Monster’s products have been selling well over the years and through the pandemic.
During the company’s recent third-quarter earnings report, it announced its highest quarterly sales in the company’s history.
Net sales increased by 9.9% year on year to US$1.2 billion, while net profit increased by 16.3% year on year to US$347.7 million.
Monster also has a clean balance sheet with around US$1.7 billion in cash and investments with no debt.
Fewer people patronised cafes and restaurants, but this source of revenue was minor for the company.
A surge in home consumption helped to boost overall sales and lifted the company’s net profit.
The energy drinks category continues to display growth in most markets including the US, according to CEO Rodney Sacks.
The company has continued to release several new Monster Energy brand energy drinks during the third quarter as well as October 2020.
Polaris (NYSE: PII)
Polaris is a market leader in the power sports and off-road vehicle industry.
The company manufactures and sells a wide variety of products such as snowmobiles, mid-sized and heavyweight motorcycles, and all-terrain off-road vehicles.
Polaris also manufactures military and commercial off-road vehicles and sells to more than 100 countries worldwide.
For the third quarter of 2020, the company reported a set of encouraging numbers.
Sales rose 10% year on year to US$1.95 billion, driven by double-digit sales increases in off-road vehicles, motorcycles and boats.
Net profit attributable to the company surged by 89% year on year to US$166.8 million.
The company generated healthy free cash flow of around US$543 million in the first nine months of 2020.
Polaris declared a quarterly dividend of US$0.62 per share, slightly higher than the US$0.61 declared in the same period last year.
Scott Wine, CEO of Polaris, has affirmed that demand remains strong and that he expects healthy sales and earnings for the rest of 2020.
Polaris recently partnered with Zero Motorcycles to co-develop electric vehicles together, with the first partnership vehicle expected to be launched by end-2021.
Polaris has its own range of motorcycles with Indian Motorcycle being the most prominent in its line-up.
Microsoft (NASDAQ: MSFT)
Microsoft needs no introduction.
The tech giant’s Microsoft Office suite of spreadsheet and word processing software is almost ubiquitous in every home and office.
The company also manufactures, licences and sells a wide range of computer software, electronics and cloud services.
For its fiscal 2021 first-quarter earnings report ended 30 September 2020, Microsoft reported a 12% year on year increase in revenue.
There was broad-based year on year growth across all of the company’s three divisions: productivity and business processes (+11%), intelligent cloud (+20%) and personal computing (+6%).
Net income soared 30% year on year to hit US$13.9 billion, while gross margin improved by two percentage points to 70% from 68% the year before.
Amy Hood, Microsoft’s CFO, reported that the company’s cloud offerings generated US$15.2 billion of revenue, up 30% year on year, helping to power Microsoft’s growth.
With the continued shift to cloud-based services, Microsoft is seeing a shift in recurring revenue to 93% within its commercial revenue segment.
Commercial bookings have also grown by 23% year on year, with remaining performance obligations hitting US$107 billion, up from US$86 billion in the same period last year.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
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