Tired of Shopify? Try This Dividend-Paying E-Commerce Stock Instead
Key Points
UPS stock reached its new all-time high last week.
The package delivery giant continues to shatter its previous records.
A high operating margin and efficient use of capital set the stage for years of further growth.
United Parcel Service ( NYSE:UPS ) stock quietly reached its new all-time on Tuesday last week after the company’s fourth-quarter and full-year 2021 numbers trounced analyst estimates. Meanwhile, Shopify ( NASDAQ:SHOP ) stock is hovering around its 52-week low as growth stocks come under pressure due to valuation concerns, inflationary pressures, and fears of slowing growth.
Income investors looking for an e-commerce play could be better suited with a position in UPS . Here’s what makes the dividend stock a great buy even at its all-time high. Image source: Getty Images. A great business at a premium price
Shopify stock has spent years crushing the market due to incredible sales growth and its emergence as an industry-leading e-commerce company. The COVID-19 pandemic threw fuel on its already red-hot growth rate as merchants took their goods and services businesses online. As a result, Shopify finished 2020 with over 1.7 million businesses, which is over 10 times the number it had in 2015. In 2021, Shopify continued to grow sales at a torrid rate even as its performance lapped its record 2020 year. Its full-year results aren’t out yet, but analyst estimates call for revenue growth of 56% compared to 2020.
The concern is that Shopify’s growth rate is slowing. Starting this year, Shiopy’s year-over-year revenue growth rate could fall to the low 30% range and then stay there for the foreseeable future. If that happens, its valuation will quickly begin to look too expensive . Pair slowing growth with increased competition and a hazy reading on the company’s earnings and free cash flow […]
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