SHOP:CC - Want $1 Million in Retirement? Invest $50000 in These 3 Stocks and Wait a Decade
2023-03-09 11:30:00 ET
Some individuals believe they can retire with $1 million in the bank and lead a comfortable life without ever having to work for another day. But building a $1 million portfolio is far from easy. For example, you need to invest $209,004 for a period of 15 years and generate returns of 11% annually to increase your portfolio value to $1 million.
But investing in growth stocks can help you reach your financial goals much faster. So, if you have $50,000 to invest right now, you can identify quality growth stocks that have the potential to increase revenue and cash flows at a consistent pace over the next decade.
Here are three such growth stocks that could turn a $50,000 investment into $1 million by 2033.
Shopify stock
One of the largest tech stocks in Canada, Shopify ( TSX:SHOP ) has trailed the broader markets by a wide margin in the last 15 months. Shopify stock is currently down 72% from all-time highs, which means it has to surge by 350% just to reclaim its historical highs.
Shopify is already the second largest e-commerce platform in the United States after Amazon and has a merchant base of more than two million. The Canadian tech giant recently increased prices on its subscription plans in more than a decade, which might help it improve profit margins and revenue growth, which has decelerated in recent months.
Shopify is also building a network of fulfillment centres to optimize the supply chain of its customers, unlocking another billion-dollar revenue stream in the process.
Analysts remain bullish on Shopify stock and expect shares to gain more than 30% in the next 12 months.
Datadog stock
A leading monitoring and security platform for cloud applications, Datadog ( NASDAQ:DDOG ) is currently valued at a market cap of US$23 billion. Cloud spending as a percentage of total IT spending is expected to increase to 17% by 2026, widening the total market size to US$850 billion from less than US$500 billion in 2022. This rapidly expanding market should act as a massive tailwind for Datadog.
The company ended 2022 with US$1.68 billion in sales — an increase of 63% year over year. Its net dollar-based retention rate stood at 130%, which suggests existing customers increased spending by 30% on the Datadog platform in the last 12 months.
The number of customers that account for US$1 million in annual recurring revenue has grown from just 11 in 2017 to 317 in 2022. Datadog should increase its revenue at a brisk pace, as long it can keep its net dollar-based retention rates at 130%.
It also ended the year with a free cash flow margin of 21%, making Datadog one of the few high-growth tech stocks that is profitable.
Curaleaf stock
The final growth stock on my list is Curaleaf ( CNSX:CURA ), one of the largest cannabis companies in the world. Curaleaf has increased its revenue from US$221 million in 2019 to US$1.3 billion in the last 12 months. Its gross profits have also increased from US$141.5 million to US$679.6 million in this period.
Curaleaf is well poised to benefit as cannabis legalization gains pace south of the border. It has a scalable, vertically integrated business model, which should allow it to reduce costs across the supply chain over time.
Down 77% from record highs, analysts tracking Curaleaf stock expect shares of the marijuana producer to more than double in the next 12 months.
The post Want $1 Million in Retirement? Invest $50,000 in These 3 Stocks and Wait a Decade appeared first on The Motley Fool Canada .
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Amazon.com and Datadog. The Motley Fool has a disclosure policy .
2023