Robinhood has garnered immense popularity among tech-savvy and new retail investors thanks to a no-fee model and sleek, easy-to-use trading experience. While it has been a tough year for speculative assets, including meme stocks, investors could consider buying blue-chip stocks Alphabet Inc. (GOOGL), Visa Inc. (V), and Walmart Inc. (WMT), which are among the most widely traded stocks on Robinhood.
Founded in April 2013, Robinhood Markets, Inc. (HOOD) is a financial services company that facilitates commission-free trades of stocks, ETFs, options, and cryptocurrencies through its mobile applications and website. Robinhood maintains membership in the Financial Industry Regulatory Authority (FINRA) and is registered with the U.S. Securities and Exchange Commission (SEC).
Robinhood is extremely popular among aggressive and millennial retail investors. As of December 31, 2022, the company had approximately 11.4 million monthly active users and $62 billion in assets under custody. The company’s net cumulative funded accounts were 23 million.
The retail investor activity that gained traction during the pandemic continues to lose pace amid the uncertain macroeconomic backdrop. Retail investors suffered huge losses after highly speculative assets, such as meme stocks, encountered rough seas this year, causing a massive retreat of investors from retail investing platforms.
While the mobile-first brokerage, Robinhood, is often associated with meme stocks, speculative option trades, and cryptocurrencies, Robinhood’s investors also hold various promising blue-chip and growth stocks in their portfolios.
Given the current uncertain market conditions, investing in fundamentally sound Robinhood stocks GOOGL, V, and WMT could be wise for significant gains in the long run.
Let’s take a closer look at the fundamentals of these stocks:
Alphabet Inc. (GOOGL)
Technology conglomerate GOOGL provides internet-related products and services in the United States, Europe, Canada, Latin America, the Middle East, and Asia-Pacific. The company operates through three segments: Google Services; Google Cloud; and Other Bets.
On March 15, 2023, GOOGL selected Fastly, Inc. (FSLY), the world’s fastest cloud platform, to operate an Oblivious HTTP Relay (OHTTP Relay) as part of FLEDGE, the Privacy Sandbox initiative to improve online privacy for Chrome users.
Victor Wong, Senior Director of Product Management at GOOGL, said, “Keeping users’ data private and safe is critical to the future of online business. And with Fastly, we’ve achieved the best of both worlds, giving users robust privacy protections, while continuing to deliver high quality and personalized experiences.”
On January 31, GOOGL’s Google Cloud announced four new and updated AI technologies to help retailers transform their in-store shelf-checking processes and improve their e-commerce sites with more fluid and natural online shopping experiences for customers.
A new self-checking AI solution, built on Google Cloud’s Vertex AI Vision, utilizes Google’s recognition of billions of products. Furthermore, Google Cloud’s Discovery AI solutions introduced new AI features to power e-commerce sites with more dynamic and intuitive shopping experiences. These new launches should bode well for the company’s growth.
GOOGL’s revenues increased 2.6% year-over-year to $69.79 billion in the first quarter that ended March 31, 2023. Its comprehensive income rose 18.9% from the year-ago value to $16.65 billion. As of March 31, 2023, the company’s cash and cash equivalents stood at $25.92 billion, compared to $21.88 billion as of December 31, 2022.
Analysts expect GOOGL’s revenue to increase 5.8% year-over-year to $299.20 billion for the fiscal year ending December 2023. The company’s EPS for the current year is expected to rise 16.2% from the previous year to $5.30. In addition, GOOGL’s revenue and EPS for the fiscal year 2024 are expected to grow 11.6% and 17.4% year-over-year to $333.90 billion and $6.22, respectively.
The stock has gained 19.3% over the past six months and 18.5% year-to-date to close the last trading session at $105.57.
GOOGL’s promising fundamentals are apparent in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
GOOGL has an A grade for Sentiment and a B for Quality. In the 57-stock Internet industry, it is ranked #12. To access GOOGL’s Value, Growth, Momentum, and Stability ratings, click here.
Visa Inc. (V)
V is a leading payments technology company that facilitates digital payments among consumers, merchants, financial institutions, businesses, and government entities. It operates VisaNet, a transaction processing network; Visa Direct, a real-time payments network; and Visa DPS. The company offers its products and services under Visa, Visa Electron, Interlink, VPAY, and PLUS brands.
On April 11, V announced a partnership with PayPal and Venmo to launch Visa+. This innovative solution enables people to move money quickly and securely between different person-to-person (P2P) digital payment platforms. Later this year, Venmo and PayPal customers in the United States could transfer money seamlessly between the two platforms.
V pays a $1.80 per share dividend annually, translating to a 0.78% yield on the current price. Its four-year average dividend yield is 0.63%. The company’s dividend payouts have grown at a 17.6% CAGR over the past five years.
For the second quarter that ended March 31, 2023, V’s net revenues increased 11.1% year-over-year to $7.99 billion. The company’s operating income grew 11.1% year-over-year to $5.34 billion. Its non-GAAP net income rose 14% from the year-ago value to $4.40 billion, while its non-GAAP EPS was $2.09, up 17% year-over-year.
Analysts expect V’s revenue to increase 11.1% year-over-year to $32.57 billion in the fiscal year ending September 2023. The company’s EPS for the ongoing year is expected to grow 14.4% year-over-year to $8.58. Moreover, the company has surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
Additionally, the consensus revenue and EPS estimate of $36.12 billion and $9.77 for the next fiscal year (ending September 2024) indicate an improvement of 10.9% and 13.9% year-over-year, respectively.
Shares of V have gained 15.8% over the past six months and 12.9% over the past year to close the last trading session at $231.78.
V’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
V has an A grade for Quality and a B for Sentiment and Stability. Within the Consumer Financial Services industry, the stock is ranked #2 out of 49 stocks.
Click here to access the additional POWR Ratings for V (Value, Momentum, and Growth).
Walmart Inc. (WMT)
Retail giant WMT operates supercenters, supermarkets, warehouse clubs, cash and carry stores, and discount stores under Walmart and Walmart Neighborhood Market brands; membership-only warehouse clubs; e-commerce websites; and mobile commerce applications. The company’s business segments include Walmart U.S.; Walmart International; and Sam’s Club.
On April 26, Walmart Health announced expansion into Oklahoma by opening four new health centers in 2024, in addition to Missouri and Arizona, and deepening its presence in Texas. Walmart Health intends to help Walmart customers live better by offering convenient access to affordable, high-quality healthcare services. This expansion might boost WMT’s profitability and growth.
On February 21, WMT raised its annual dividend for the fiscal year 2024 to $2.28 per share, an increase of 2% from the last fiscal year. “Dividends continue to be a part of our diversified capital returns approach. We're proud to be increasing our annual dividend for the 50th consecutive year, a milestone for our company,” said John David Rainey, WMT’s executive vice president and chief financial officer.
WMT’s four-year average dividend yield is 1.65%, and its annual dividend of $2.28 yields 1.50% at current prices. The company’s dividend payouts have increased at CAGRs of 1.8% over the past three years and 1.9% over the past five years.
WMT’s total revenue increased 7.3% year-over-year to $164.05 billion in the fourth quarter that ended January 31, 2023. Its adjusted operating income grew 6.3% from the year-ago value to $6.37 billion. In addition, consolidated net income attributable to Walmart rose 76.2% year-over-year to $6.28 billion, and its adjusted EPS came in at $1.71, an increase of 11.8% year-over-year.
Analysts expect WMT’s revenue for the fiscal year ending January 2025 to be $650.71 billion, representing 3.6% year-over-year growth. The company’s EPS for the same period is expected to increase 11.2% year-over-year to $6.80. Also, the company has topped the consensus revenue estimates in each of the trailing four quarters.
The stock has gained 6.5% over the past six months to close the last trading session at $151.77.
WMT’s solid prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
WMT has an A grade for Stability and Sentiment. It has a B for Growth and Quality. Among the 37 stocks in the A-rated Grocery/Big Box Retailers industry, it is ranked #2.
In addition to the POWR Ratings stated above, we have also given WMT grades for Value and Momentum. Get all WMT ratings here.
Discover 10 widely held stocks that our proprietary model shows have tremendous downside potential. Please make sure none of these “death trap” stocks are lurking in your portfolio:
GOOGL shares fell $0.45 (-0.43%) in premarket trading Monday. Year-to-date, GOOGL has gained 19.65%, versus a 8.31% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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