We all love a good bargain, whether we're shopping for food, clothing -- or stocks. And even though the stock market has gained this year -- with the S&P 500 rising in the double digits -- there still are plenty of deals out there waiting to be discovered. These are quality stocks that may have fallen out of favor in the short term, but their long-term prospects remain solid.
Right now, I can think of two you could snap up for about $100. I'm talking about big pharma giant Pfizer (NYSE: PFE) and e-commerce company Etsy(NASDAQ: ETSY). These players have what it takes to grow over time -- and that could be great news for your portfolio. Let's find out more.
Pfizer stock has suffered in recent times as people focus on the decline in coronavirus vaccine demand. The company is a leader in the vaccine and treatment market, and those products together brought in more than $55 billion in revenue last year.
But it's important to remember two things: First, Pfizer's coronavirus products will see a decline in revenue, but that doesn't mean this revenue will disappear. The company still is likely to generate blockbuster sales from both the vaccine and treatment as the virus continues to circulate, much like the flu.
Second, Pfizer doesn't depend on these products only. The company has a broad portfolio of medicines and vaccines, including other blockbusters. And, even more importantly, Pfizer has invested to grow its portfolio internally through its own pipeline and externally through acquisitions. In fact, Pfizer expects to generate $20 billion in non-coronavirus revenue in 2030 thanks to a current batch of product launches -- and $25 billion in 2030 revenue thanks to business deals.
At the same time, Pfizer also is focusing on rewarding shareholders through dividend growth and share buybacks. The company paid out $4.6 billion to shareholders in the first half of the year. So, you can count on generating some passive income if you invest in this pharma giant.
Today, Pfizer's shares trade for only 10 times forward earnings estimates -- and you can pick up a share for about $34.
Etsy shares soared earlier in the pandemic. More recently, though, as investors avoided stocks linked to discretionary spending, the stock has been on the decline. Etsy operates a platform that connects sellers of handmade goods with shoppers.
But here's the good news: Etsy has kept the gains it made earlier in the pandemic. For example, revenue is considerably higher today than it was back in 2019.
And what's particularly encouraging is Etsy's ability to keep shoppers coming back. In the most recent quarter, the company reported a 3% increase in active buyers to reach a record high of 91 million. The company also reactivated 21% more buyers than it did in the year earlier period. And buyer retention trends improved from the previous quarter and previous year. All of this is significant because it supports the idea of sustained revenue growth moving forward.
What I particularly like about Etsy, though, is its capital light business model. This means Etsy doesn't have to make huge capital investments to grow. For example, Etsy doesn't have to build factories and transport networks since sellers on the platform store and ship their own creations. As a result, Etsy can turn most of its adjusted EBITDA into free cash flow.
Considering this, trading for about $67 a share and at 14 times forward earnings estimates, Etsy looks like a great place to park your $100.
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