One age group little discussed by popular media is Gen Z. This group includes people born between 1997 and 2012. With the emergence of low-cost brokerages like Wealthsimple, DIY investing has become very popular with these individuals. However, choosing the right companies can be very difficult for investors that haven’t been taught how to invest. So, in this article, I aim to help reveal three companies that would be suitable holds for Gen Z investors.
Start with a proven blue-chip growth stock
Shopify (TSX:SHOP)(NYSE:SHOP) is the first stock that Gen Z investors should consider holding in their portfolios. Yes, it has grown significantly since its IPO. However, the company is nowhere near finished growing. While it likely won’t produce a 10 times return over the next decade, investors will still do very well holding this company. The e-commerce industry represented about 4% of all Canadian retail sales in 2019. In 2020, e-commerce accounted for over 11% of all retail sales in Canada. As the industry continues to grow, expect Shopify to benefit greatly.
From a financial point of view, Shopify is a monster. In 2020, the company recorded over $2.9 billion in revenue. That represents an 86% increase on its total revenue in 2019. So far, in 2021, Shopify has reported two quarters of earnings. In Q1, the company reported a 110% year-over-year increase in its quarterly revenue. In Q2, Shopify saw a 57% year-over-year increase.
It’s important to note that Q2 was the first quarter in 2020 to see a massive boost in revenue due to the COVID-19 pandemic. Despite already recording record-breaking numbers in Q2 last year, Shopify has shown an ability to continue growing. Finishing in first and second place of the TSX30 rankings in 2020 and 2021, respectively, Shopify is a top stock with many years of growth ahead.
Another company poised to grow with the e-commerce industry
Nuvei (TSX:NVEI) is the second company that Gen Z investors should consider holding. The company has been a top stock since its first day of trading, when it closed the largest tech IPO in Canadian history. Since then, Nuvei stock has gained 272%. Like Shopify, Nuvei is poised to grow alongside the emerging e-commerce industry. While it doesn’t offer e-commerce platforms, the company provides merchants with the ability to complete online transactions, giving it exposure to the online retail industry.
A smaller company, Nuvei has already managed to establish an impressive global presence. Its platform is used in more than 200 global markets, accepts 470 payment methods, and is compatible with 150 currencies and 40 cryptocurrencies. Nuvei has managed to execute its plan to grow via an aggressive merger and acquisition strategy. Valued at a market cap of $25 billion, this stock still has a lot of growth to come.
The health industry is changing at a rapid pace
Another industry that is seeing a lot of change today is the healthcare industry. More specifically, the telehealth industry has become much more popular as a result of the COVID-19 pandemic. Economists are forecasting the industry to grow at a CAGR of 26.5% from 2021 to 2026. If that happens, companies like WELL Health Technologies (TSX:WELL) could see massive gains from here.
WELL Health operates 74 primary health clinics in Canada and two in the United States. In addition, there are more than 2,800 clinics on the company’s EMR network. In Q2 2021, WELL Health saw more than 559,000 omnichannel patient visits. Led by Hamed Shabahzi, WELL Health plans on growing via strategic acquisitions and mergers. Using this playbook, the company has successfully expanded into the United States last year. Expect more growth from WELL Health in the coming years.
