Is Robinhood saying, “Gimme your stimmy, gimme your stimmy, gimme your stimmy, gim For select customers, the trading site recently announced a cash rewards program that offers tiers of up to $250 in cash incentives based on net deposits over the next two weeks. However, this program is unrelated to the stimulus payments that the majority of Americans are receiving. However, the timing is ideal, since many investors now have additional cash to invest thanks to the $1.9 trillion stimulus plan that was recently passed into law.
Even if you aren’t part of the select group qualifying for this cash rewards program, there are a number of popular stocks on the Robinhood trading platform that are appealing investment alternatives. Here are three excellent Robinhood stocks to consider purchasing with your $1,400 stimulus cheque.
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Amazon.com
Granted, $1,400 is insufficient to purchase even one Amazon.com share (NASDAQ:AMZN). However, Robinhood, as well as a slew of other trading sites, allow you to purchase fractional shares. And putting whatever money you have into Amazon should pay off handsomely in the long run.
By alone, Amazon Web Services (AWS) is a compelling argument to invest in the technology stock. The cloud services division brought in $45.4 billion in sales last year, increasing roughly 30% from the previous year. It was responsible for 63% of Amazon’s total operating income.
Amazon, of course, has a slew of other growth engines. Although the corporation is the king of e-commerce, it only accounts for around one-fifth of total retail sales in the United States. Amazon also has considerable potential in other areas. With the company moving into online pharmacy and telemedicine, I’m particularly excited about its healthcare possibilities.
Despite its market capitalization of $1.5 trillion, there’s a strong case to be made that Amazon is undervalued. The stock is currently trading at a little more than four times sales. This behemoth should grow much bigger thanks to its enormous growth potential.
Pfizer
Pfizer (NYSE:PFE) may appear to be a disappointment. After all, during the last few years, the stock has underperformed the S&P 500 index. But there’s a reason Pfizer is among Robinhood’s top 20 most popular stocks: Its economic trajectory is about to improve dramatically.
For one thing, Pfizer no longer has an albatross around its neck in the form of a basket of older medications that have lost exclusivity. After Pfizer sold off its Upjohn unit and merged it with Mylan in November, those medications are now available through Viatris.
The COVID-19 vaccination BNT162b2 is the major one for Pfizer. The vaccine is expected to bring in at least $20 billion in revenue for Pfizer this year. The large pharma will split profits evenly with BioNTech, its partner. Pfizer’s top and bottom lines, on the other hand, will be hit hard. With new coronavirus variants on the loose (and possibly more on the way), the company’s COVID-19 vaccinations might generate significant recurring revenue for a long time.
Pfizer’s stock is trading at a discount to predicted earnings of less than 11 times. The corporation also pays a generous dividend, which now yields around 4.4 percent. Pfizer appears to be a terrific company to buy right now if you’re searching for a mix of growth, value, and income.
Last year’s stimulus payments immediately benefited Square Square (NYSE:SQ). Because of the enormous US government stimulus program, the fintech leader’s client acquisition, customer engagement, and Cash App transaction volume rose in the second quarter of 2020. With the most recent stimulus round, expect a repeat performance.
However, this type of short-term increase isn’t the key reason why Square is an excellent stock to buy right now with your stimulus check. The company has tremendous long-term growth potential.
Many people are familiar with Square because of its compact card readers. These devices are critical to the company’s basic payment processing operations. The digital wallet Cash App, on the other hand, is a much bigger growth engine for Square. I expect Square’s banking services to become an increasingly key income source now that the business owns a bank.
Yes, at first look, Square’s valuation appears to be astronomical, with its stock trading at 196 times projected earnings. Earnings multiples, on the other hand, might be deceiving for companies in their early phases of development. That, I believe, is the case for Square. In the future, there will be a lot more digital payments and a lot less cash payments. Square is positioned to be a tremendous winner in this future.
This post is the author’s own view, which may differ from a Motley Fool premium advice service’s “official” recommendation position. We’re a mishmash! Questioning an investing theory, even our own, encourages us to think critically about investing and make decisions that will make us smarter, happier, and wealthier.
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