As of the current analysis, the stock market, represented by the S&P 500 index, which includes 500 of the largest companies in America, is experiencing a decrease of approximately 10%. This decline is classified as a correction, characterized by a drop ranging between 10% and 20%.
Concerns about an approaching recession have led some investors to consider enhancing their cash reserves within their portfolios. However, many long-term investors are seeking "monster stocks," which are stocks that boast impressive performance records or significant growth potential. Here are five such stocks for consideration.
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SoFi Technologies
SoFi Technologies (SOFI, up 4.39%) has experienced substantial growth, with its revenue more than quintupling since 2019. This fintech company initially focused on aiding millennials with student loans and has since transitioned into a banking institution targeting over 10 million members. It offers banking, investing, and insurance services. A Motley Fool Research report indicates that around 75% of banking customers might switch banks for more favorable options. SoFi has adopted a similar strategy to retain and expand its membership, recently increasing its personal loan funding by $2 billion to meet demand. SoFi could become a significant stock in the future, especially if a recession doesn’t emerge, which could negatively impact banks. Investors concerned about a recession may consider monitoring SoFi or waiting for a price drop. -
Realty Income
Realty Income (O, down 0.80%) stands out in the dividend sector as a real estate investment trust (REIT). REITs are mandated to distribute at least 90% of their taxable income as dividends, and Realty Income’s dividend yield recently stood at 5.6%, distributed monthly rather than quarterly. The company has consistently increased its dividends for 110 consecutive quarters. By the end of 2024, Realty Income’s portfolio encompassed over 15,600 properties across all U.S. states and parts of Europe, with major tenants like 7-Eleven, Dollar General, Walgreens, Dollar Tree, Whole Foods, Lowe’s, and Chipotle Mexican Grill. The stock appears reasonably valued with a forward price-to-earnings ratio of 44, slightly above its five-year average of 41. Management projects slower growth for 2025, which may limit dividend increases, yet it remains a sound long-term investment. -
Meta Platforms
Meta Platforms (META, up 4.06%), renowned for its Facebook platform, also comprises Instagram, Messenger, Threads, and WhatsApp. Approximately 3.35 billion users engage with at least one of Meta’s services daily, providing significant opportunities for monetization. Meta Platforms is investing heavily in artificial intelligence (AI). Although potential tariffs concern many businesses, Meta is perceived as less vulnerable to these threats. Despite forecasts of a slowdown in 2025, with revenue increasing 21% year over year in the fourth quarter, the company’s forward P/E ratio of 20 remains slightly below the five-year average, suggesting potential stability. -
Shopify
Shopify (SHOP, up 6.15%) plays a behind-the-scenes role in e-commerce, assisting businesses in their operations and growth. As the second-largest retail e-commerce entity, Shopify posted a 31% increase in fourth-quarter revenue year over year and a 26% rise for the full year. Much of its revenue is recurring, thus appealing to investors. For those optimistic about e-commerce’s future, Shopify presents a case for investment. Its forward P/E of 39, while not low, is significantly below its historical average of 118, pointing to potential undervaluation. - Ford Motor Company
Ford Motor Company (F, up 1.40%) might not immediately appear as a monster stock, but it is perceived as undervalued with a price-to-sales ratio of 0.2, below its five-year average of 0.29. Ford offers a substantial dividend yield of 7.8%. However, tariffs pose a potential threat, although some speculate Ford could benefit from exemptions or reductions due to its predominantly domestic manufacturing operations. Investors might consider Ford for its dividend but should monitor the stock’s performance for any developments.
Investors are encouraged to consider these stocks further and conduct additional research on any that capture their interest.
Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, serves on The Motley Fool’s board of directors. Selena Maranjian holds positions in Meta Platforms, Realty Income, Shopify, and SoFi Technologies. The Motley Fool holds positions in and recommends several companies mentioned in the article, as well as recommending options on Chipotle Mexican Grill. The Motley Fool follows a disclosure policy.
