The first few months of 2024 have certainly been some great market days for investors.with S&P500 Several new records have been set so far in 2024, and many investors are more optimistic about putting money into stocks than they were just a few months ago.
Wall Street has a habit of experiencing bear markets on average once every four years. But the good news is that in each case, the market not only recovered, but ultimately reached new highs.
Bull markets tend to occur on average every five to six years and typically last much longer than bear markets. So if you invest in great companies, stick with them, stay invested through highs and lows, you'll benefit from the best and worst days of the stock market.
On that note, if you have $1,000 to invest right now, here are two great companies to consider.
1. Innovative industrial property
innovative industrial property (NYSE: IIPR) It's something of a unicorn in the marijuana stock world because it doesn't actually grow and sell cannabis. Instead, the company operates as a real estate investment trust (REIT).
Innovative Industrial Properties acquires cultivation facilities, distribution centers, and other related real estate from state-licensed cannabis operators. We then rent these facilities to operators through long-term contracts.
This model increases efficiency by providing regular rental income for innovative industrial properties and allowing operators to focus on the business of growing and selling marijuana.
It is important to note that REITs only lease to medical cannabis business operators. The medical marijuana business is more regulated than the recreational market and is undergoing more widespread legalization across the country. As of this writing, approximately 90% of Innovative Industrial Properties' portfolio is leased to multi-state operators (MSOs), and approximately 60% of its tenants are publicly traded companies.
In 2023, the company reported sales of $310 million and net income of $164 million. These two numbers increased by 12% and 5%, respectively, from 2022. Adjusted funds from operations, a key indicator of REIT performance, totaled $257 million for the year, an increase of 10% from the previous year.
As of year-end, the REIT owned 108 properties in 19 states. Currently, 95.8% of the Company's operating portfolio is leased through triple net leases, with tenants paying rent plus most of the costs associated with maintaining the property.
Another great number is the rental collection rate, which remained at 100% as of February. The company also has an excellent yield and a long history of raising dividends. The current yield is 7%, which is significantly higher than the average yield of stocks trading on the market. S&P500 (1.3%), and the dividend grew 300% over the next five years.
The cannabis market can be a dangerous place to park your cash, at least until some uniform legislation is enacted at the federal level. That said, the medical cannabis niche represents a large and growing market.
Innovative Industrial Properties operates a model that is unusual in our industry, delivering stable and recurring returns for our business and our shareholders. Investors may want to consider getting a piece of the action.
2. Alibaba
alibaba group holding (New York Stock Exchange: Baba) It's been an unstable few years. Leadership changes, regulatory headwinds, a difficult macroeconomic environment, and slower overall growth are just some of the factors that contributed to the stock price decline. As of this writing, stock prices are down about 30% from a year ago and about 60% from five years ago.
Alibaba is the leader in e-commerce in China, the world's second-largest economy after the United States, according to the International Monetary Fund. China's e-commerce market is expected to reach a valuation of approximately $4 trillion by 2027.
The company controls about 50% of China's e-commerce market through its various platforms, including namesake Alibaba, AliExpress, Taobao, and Tmall. The retail chain Freshippo is also increasing its presence in the food and fresh products field.
Alibaba also has a large presence in other lucrative markets, such as cloud infrastructure services, digital media, and entertainment. Alibaba Cloud controls about 40% of the country's cloud infrastructure market. The company had planned to take its cloud division public, but scrapped that idea late last year, hurting its stock price.
China has imposed one of the world's strictest coronavirus lockdowns, and the gradual reopening of the economy has led to slower growth for market leaders like Alibaba. There was also the $2.8 billion fine imposed on Alibaba by Chinese regulators in an antitrust case several years ago. In short, a variety of factors have contributed to the company's recent struggles, some of which are outside of its control.
China's economy is already showing strong recovery. Alibaba will benefit as these headwinds subside because of its market leadership and strong financial position.
Overall revenue for the most recent quarter rose 5% to $37 billion, and the company ended the period with about $92 billion in cash and investments. For risk-tolerant investors, Alibaba's remaining significant growth opportunities in several rapidly expanding markets may be worth revisiting, given its current cheap valuation.
Need to invest $1,000 in innovative industrial real estate right now?
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Rachel Warren has no position in any stocks mentioned. The Motley Fool has positions in and recommends innovative industrial real estate. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
“The Bull Market Is Coming: 2 Incredible Growth Stocks to Invest $1,000 in Now” was originally published by The Motley Fool
