2 winning growth stocks that scream buy now

The stock market continues to provide growth opportunities for investors across a wide range of sectors. If you have cash to invest in great companies, you can use it consistently through the ups and downs of the market as you work to achieve your long-term financial goals.

Even if you have a modest amount to invest, strategies like dollar-cost averaging can help you increase your positions in your favorite stocks over time. You should only invest money that you won’t need in the near future, not money that you might otherwise use for financial obligations such as bills or paying rent.

As such, if you’re looking for the biggest growth stocks to buy right now, here are two names to consider.

1. His and her health

His and her health (HIM -9.60%) offers subscription-based services that allow users to access prescription and over-the-counter products online with easy home delivery. Users can also conduct telehealth visits with medical providers across a variety of specialties, including dermatology, sexual health, weight loss and mental health issues.

The company is doing incredibly well, with revenues and profits growing rapidly in recent quarters. In the last 12 months alone, Hims & Hers Health shares have increased by over 180%.

While the telehealth company’s stock valuation may seem high, the company demonstrates to customers the strength of its valuation proposition and derives significant profitability from its core business model. Hims & Hers makes most of its money from recurring subscriptions and controls a significant portion of the distribution of products ordered through its platform. It operates several of its own facilities with dedicated, licensed mail-order pharmacies and also works with certain third-party partners that facilitate the fulfillment and distribution of certain prescription and over-the-counter products.

In the second quarter of 2024, Hims & Hers Health reported revenue of $315.6 million, up 52% ​​from the prior year. Operating cash flow for the three-month period was $53.6 million, up 219% year over year, and free cash flow increased 377% to $47.6 million. The company is working towards consistent profitability and has generated a net profit of $13.3 million in the three-month period, compared to a net loss of $7.2 million in the same period last year.

On an adjusted earnings before interest, tax, depreciation and amortization (EBITDA) basis, Hims & Hers Health earned $39.3 million in the second quarter. This means an increase of 270% compared to the previous year.

The company’s subscriber base is also growing at a significant pace. Hims & Hers ended the quarter with 1.9 million subscribers. This represented an increase of 43% compared to the subscriber base just a year ago.

Management remains unwavering in its belief that each of the company’s major specialty health segments is on track to achieve revenues of $100 million or more in 2025. Given the company’s recent and ongoing financial performance, this does not seem an unrealistic goal by any means. In the first half of 2024 alone, Hims & Hers generated approximately $594 million in revenue, an increase of 49% compared to the same period last year. Investors who want to get in on the action and follow the company’s growth story may consider even a modest investment in leading healthcare companies.

2. Mastercard

MasterCard (MOTHER -0.12%) accounts for approximately 24% of all credit card transactions processed worldwide. The company is also the second largest U.S. credit card processor by market share, with a share of approximately 25%.

Given the volatile state of consumer spending over the past few years, as well as changes in consumer savings against the backdrop of consumer volatility, this company could represent a high-risk investment if it made money from sources such as lending. Mastercard makes money in a completely different way.

In fact, most of Mastercard’s revenue comes from fees charged every time one of its branded cards is swiped (either at a brick-and-mortar merchant or as part of a digital transaction). These fees are borne by Mastercard customers, i.e. financial institutions that issue debit and credit cards with the company’s brand. Therefore, Mastercard is not dependent on the consumer paying off the credit card balance each month.

The basis for maintaining the company are fees charged from banks and other financial entities related to the gross volume of business related to its branded products. Mastercard also derives a smaller portion of its revenue from data analytics solutions, consulting and other services it provides.

Looking at the most recent quarter, the second quarter of fiscal 2024, Mastercard reported net revenues of $7 billion, up 11% from the prior year. It also posted net income of $3.3 billion on operating income of $4 billion. These two numbers represented increases of 15% and 10%, respectively, in the second quarter of 2023.

Gross dollar volume increased 9% in the second quarter, while purchase volume increased 10% compared to the prior year. Mastercard’s resilient business model has not only given it enormous financial strength, but has also enabled it to continue to support the payment of generous dividends.

Although Mastercard’s dividend yield is less than 1% at the time of writing, its annual forward dividend is $2.64 per share. At this point, the company had increased its dividend every year for 13 consecutive years, and its dividend payout had increased 100% in the last five years alone. The company also maintains a payout ratio of approximately 19% of earnings. Mastercard had more than $7 billion in cash on hand at the end of last quarter.

Investors looking for a company focused on consistent growth, returns and income may find Mastercard suitable for a long-term buy-and-hold position.