This year hasn’t been easy for investors. The eleven-year bull market collapsed during the coronavirus pandemic, with all stocks moving into bearish territory. Not only that, but the market bottomed out on March 23, and unemployment claims reached 40 million worldwide.
Despite all these factors, futures have been rallying over the last several weeks. Traders are thus, at last, hoping for a fast recovery. While there are still some obstacles, like soured U.S.-China relationship and the recent volatile demonstrations in the United States, the general mood is optimistic.
Analysts advise investors to rebuild their portfolios, most of which suffered after massive sell-offs during the deepest part of the pandemic crisis. They recommend buying several stocks in June, Adobe among them.
Why is Adobe the right choice?
Everyone who has any interaction with computers knows about this company, or at least its programs. This stock is an especially good choice for enterprising investors. However, Adobe is a large-cap growth stock, and it doesn’t offer any dividends. Hardcore income investors probably wouldn’t find it very attractive because of that.
On the other hand, if you look for a long-term investment, then Adobe is an excellent choice. The company’s software offerings, which have become necessary for creators, photographers, designers, film-makers, and publishers of all sorts, are vital enough for guaranteeing its staying power.
Companies that provide software via a subscription model and through the cloud, like Adobe, usually have rapid earnings growth over time. Adobe’s revenues have compounded at a 22% annualized rate in the last five years. The earnings growth has almost tripled that, skyrocketing by 63% annually.
Despite the coronavirus pandemic, the stock achieved record quarterly revenues of more than $3 billion for the first quarter of this year. That number represents 19% year-over-year growth.
While growth can’t continue forever with that rate, Adobe’s suite of products, including Photoshop, Premiere, Illustrator, and InDesign, have withstood the test of time and became invaluable for lots of users. They will continue bringing in income for the stock for a long time still.
