As part of the $ 2 trillion economic stimulus package, formally known as the CARES Act, the federal government will distribute one-off cash payments to most U.S. families.
To tell the truth, if you have lost revenue due to the terrible COVID-19 pandemic, or if you have current financial needs, you should certainly use your stimulus payment to help you and your family get through the storm. On the other hand, if your income has not been interrupted and it is practical to invest your stimulus payment, now could be an excellent time to put that money to work for your future.
With that in mind, here’s why Real estate income (NYSE: O), MasterCard (NYSE: MA), is Square (NYSE: SQ) they could be three excellent choices that could possibly multiply the stimulus control multiple times.
Bulletproof income and plenty of room to grow
Realty Income is a real estate investment fund, or REIT, specializing in single tenant properties, especially those occupied by retail tenants. And while retail has certainly been one of the worst parts of the US economy, most Realty Income tenants are “core businesses” that are still open for business. Major tenants include Walgreens, 7-Eleven, Dollar General, Walmart, CVS, Kroger and Home Depot, to name a few.
Some of Realty Income’s tenants are likely to suffer, for example cinemas, fitness centers, and restaurants combine for just under a quarter of the portfolio. But all Realty Income tenants are long-term leased, and most are high-quality companies that are expected to overcome the pandemic.
Realty Income’s share price has lost almost half its value since its mid-February high and is now performing more than 6.4%. The company has increased its dividend over the past 90 consecutive quarters and has an extraordinary history of producing total returns to beat for the market for investors.
Don’t let a slowdown in consumer spending cause you to lose sight of the big picture
It is not surprising to see Mastercard falling by over 30% in the past month and a half. After all, the company earns most of its money from processing payments and collecting a small percentage of the volume of transactions that flows through its network.
There is no doubt that consumer spending will suffer during this recession, especially with so many American businesses closed indefinitely. The company’s revenue for at least the first and second quarters of 2020 is likely to be bad.
However, Mastercard still has a great track of growth ahead of it and should be able to get back on track with the good return of the economy. Most payment transactions worldwide still take place in cash and the trend towards a cashless economy is expected to steadily increase Mastercard’s payment volume for years to come. And the opportunities for cross-border money transfers are huge. With the lack of competitive pressures and tons of space for cashless payments, Mastercard could be a great long term deal right now.
A small business and consumer finance ecosystem
Fintech Square is trading for less than half of its all-time highs, and it’s easy to see why. Square’s core business is to serve small businesses, many of which are closed and struggling to survive right now. Its Square Capital lending platform could see customers unable to repay loans, and even its cash App could suffer when people spend and send less money.
Having said that, Square has done a fantastic job of growing its business and, although this can certainly produce poor 2020 numbers, the company’s long-term opportunities are enormous. Square’s payment processing core business is seeing over $ 100 billion in annual payment volume, Square Capital’s corporate loan platform has been very successful and with the application of the bank card recently granted by the company, c there is even more room to grow. In addition, the Cash app has evolved from a simple person-to-person payment platform into a multi-functional financial platform with 24 million active users.
However, growth may be just beginning. Square estimates that it has a $ 85 billion addressable market opportunity in its business in the United States and does not even include the international potential or the $ 60 billion addressable market it sees through individuals. Overall, Square estimates that it has captured less than 3% of its market opportunities. And with a solid balance sheet, society should have no problem getting through difficult times.
Invest in the long term
While all three of these titles are excellent long-term opportunities, it is important to realize that there may still be huge volatility until the COVID-19 pandemic subsides and life can begin to return to normal. If the pandemic continues longer than expected, we could certainly see further downward pressure from here. So if you invest, prepare to take a short-term roller coaster ride, but when you look back a decade or two from now, I’m sure you’ll be happy that you’ve decided to add them to your wallet.