Investing in the Future: Two Growth Stocks You Can Buy with $500 Right Now
Growth Stocks Amid Mixed Sentiment
Investors have displayed a fluctuating interest in growth stocks over the past few years, even amidst a prolonged bull market. As inflation and interest rates create unease in the economy, many investors are reassessing their strategies. However, one thing remains clear: solid, quality businesses can provide substantial returns over the long haul, regardless of the market environment. If you find yourself with $500 ready to invest, consider allocating that into these two promising growth stocks.
1. PayPal (NASDAQ: PYPL)
PayPal’s recent earnings report saw its shares dip slightly, yet they’re still up by about 30% since the beginning of 2024. However, it’s essential to note that these shares are trading significantly lower than their peaks in 2021—down approximately one-third from those all-time highs. It’s been a rollercoaster ride for PayPal following the pandemic surge, with disappointing quarterly results and changing consumer spending patterns that have made investors nervous.
Despite these challenges, there’s still much to admire about PayPal’s trajectory. As of the third quarter, the company reported a net revenue increase of 6%, reaching $7.8 billion. Operating income climbed 19% to a solid $1.4 billion, showcasing financial resilience. Though the number of active accounts grew by only 1%, total payment volume enjoyed a 9% rise. Notably, payment transactions per active account saw a 9% increase over the trailing twelve months.
Moreover, the company remains profitable with net income of $1.1 billion, slightly down 1% from last year. Cash from operations also totaled $1.6 billion. This isn’t the picture of a failing business but rather one that adapts to a rapidly evolving environment impacting both consumers and businesses utilizing its platform. If you’re a long-term conservative investor looking to hold for three to five years, PayPal presents an attractive case.
2. Chewy (NYSE: CHWY)
Chewy has attracted renewed investor interest with shares climbing approximately 67% over the last six months, a resurgence reminiscent of its pre-pandemic popularity. This e-commerce platform, widely recognized for pet food and toys, offers a diverse range of products, including pet health insurance and veterinary services. Recently, the company shared plans to launch brick-and-mortar veterinary locations, signaling a bold strategy that aligns with its long-term goals.
Chewy’s veterinary clinics offer a unique acquisition funnel, reportedly exceeding initial expectations for new customer acquisitions. It’s showing promise that could boost net sales per active customer significantly. Surprising many investors, in the second quarter, Chewy reported overall net sales growth of 2.6%, totaling $2.86 billion. Even more impressively, net income skyrocketed to $299 million, a staggering increase of 1,380% compared to the same period a year prior.
Of particular interest is Chewy’s Autoship program, which now comprises 78% of net sales — a 6% increase year-over-year. Additionally, 85% of Chewy’s sales come from consumables and health-specific categories, representing non-discretionary spending in times of economic uncertainty. With expansion into the Canadian market already underway, Chewy is a potentially significant growth story that savvy investors could capitalize on now and into the future.
Conclusion
Market fluctuations and economic apprehensions can create a challenging landscape for investors. However, if there’s one principle that holds true, it’s the value of investing in fundamentally sound businesses. PayPal and Chewy are two stocks that stand out amidst the chaos, each poised for substantial long-term growth. If you have $500 to invest, consider placing it into one of these exceptional companies—your future self may thank you for it.
