Drop Bitcoin and Buy These 2 Growth Stocks That Are Ready to Takeoff Bitcoin has been slumping over the past couple of months due primarily to China's intensifying anti-cryptocurrency crackdown. Conversely, as the globa...
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Bitcoin has been slumping over the past couple of months due primarily to China's intensifying anti-cryptocurrency crackdown. Conversely, as the global economy continues to recover at an impressive pace, we think growth stocks McDonald's (MCD) and Linde (LIN) are well-positioned to perform much better than bitcoin in the near term. Read on for some details.
Bitcoin has taken a hit since China increased its crackdown on domestic cryptocurrency mining owing to environmental concerns. Approximately 65% - 75% of global bitcoin mining is concentrated in China. However, the government crackdown has halted roughly 90% of China's bitcoin mining capacity. Bitcoin has nearly halved in value since hitting its all-time high of $64,863.10 on April 14 and has declined 11.8% over the past five days. While bitcoin has gained slightly over the past two days, the cryptocurrency markets are expected to remain subdued in the near future.
While the cryptocurrency market remains under pressure, equity markets have been showing strength due to favorable macroeconomic trends. The Nasdaq Composite hit its 14,317.66 all-time high yesterday, while the S&P 500 is currently hovering marginally below its all-time high. Declining unemployment claims and rising industrial and manufacturing activities have driven renewed interest in growth stocks, as evidenced by Vanguard Growth ETF's (VUG) 6.6% gains over the past month versus the broader S&P 500 index's 2.2% returns.
Given this backdrop, we think the prices of growth stocks McDonald's Corporation (MCD) and Linde plc (LIN) could hit fresh highs in the near term. In fact, it could be smart to now liquidate one's investments in bitcoin and reinvest the money in these two stocks.
McDonald's Corporation (MCD)
MCD is the world's largest fast-food chain by revenue. It is currently ranked #157 in the Fortune 500 list. The company has more than 38,000 stores in more than 100 countries. The price of shares of MCD have increased 27.6% over the past year, and 8.7% year-to-date.
On May 20, MCD announced its plans to invest in diverse media companies as part of its marketing campaign. The company aims to enter multi-year partnerships with such companies to strengthen its broader marketing supply chain, therefore appealing to a diversified customer base.
MCD's total assets have increased at a 14.9% CAGR over the past three years, while its EPS increased slightly over this period.
MCD's revenues increased 9% year-over-year to $5.12 billion in its fiscal first quarter, ended March 31, 2021. Its operating income increased 35% from the same period last year to $2.28 billion, while net income rose 39% from the prior year quarter to $1.54 billion. EPS came in at $2.05, indicating a 39% improvement from its year-ago value.
A $22.43 billion consensus revenue estimate for its fiscal year 2021 indicates a 16.8% improvement year-over-year. Analysts expect MCD's EPS to rise 42.6% year-over-year to $8.63 in the current.
MCD has an overall A rating, which equates to Strong Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.
MCD has an A grade for Quality, and B for Growth, Momentum, Sentiment, and Stability. Of the 46 stocks in the A-rated Restaurants industry, MCD is ranked #4.
Beyond what we've stated above, we have rated MCD for Value also. Get all MCD Ratings here.
Linde plc (LIN)
LIN is an industrial gases and engineering company based in the United Kingdom. The company manufactures equipment for the production and storage of industrial gases, gaseous medication and accessory medical products. On March 13, LIN was added to the S&P 100 index.
On May 4, LIN received the best possible rating for its sustainable disclosure practices from ISS Environment QualityScore. LIN's Chief Technology and Sustainability Officer Todd Skare said, "We have set ambitious targets for our own operations while also working with our customers to reduce their emissions through our applications and technologies. We are committed to the highest standards of transparency and disclosure and are pleased to receive this recognition from ISS."
LIN's revenues have increased at a 33.4% CAGR over the past three years, while its net income increased at a 30.1% CAGR over this period. The company's total assets and levered free cash flow have increased at CAGRs of 60.4% and 54.8%, respectively, over the past three years.
For its fiscal first quarter, ended March 31, LIN's sales increased 7% year-over-year to $7.24 billion. This can be attributed to a 5% rise in underlying sales. Its adjusted operating profit stood at $1.69 billion, up 25% from the year-ago value. Its net income increased 71% from the prior year quarter to $980 million, while EPS increased 73.8% from the same period last year to $1.86.
The Street expects LIN's revenues and EPS to rise 15.3% and 33.2%, respectively, year-over-year to $7.35 billion and $2.53 in its fiscal second quarter, ending June 2021. The company has an impressive earnings surprise history. It surpassed consensus EPS estimates in each of the trailing four quarters. Shares of LIN have gained 36.2% over the past year, and 8.1% year-to-date.
It's no surprise that LIN has an overall rating of B, which equates to Buy in our proprietary rating system. The stock has an A grade for Momentum, and B for Sentiment, Stability, Growth, and Quality. LIN is ranked #33 of 99 stocks in the A-rated Chemicals industry.
Click here to check out additional LIN Rating for Value.
MCD shares were trading at $233.67 per share on Thursday morning, up $0.43 (+0.18%). Year-to-date, MCD has gained 10.17%, versus a 14.43% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do's and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.
The post Drop Bitcoin and Buy These 2 Growth Stocks That Are Ready to Takeoff appeared first on StockNews.com
