Key Points
- AMC could continue to perform well over the near term, but its long-term growth prospects are less certain.
- Several other stocks are poised to deliver stronger long-term growth by capitalizing on unstoppable trends.
If you're looking for trash talk about AMC Entertainment(NYSE:AMC), you won't find it here. I fully expect AMC's business to rebound significantly this year and into 2022. It's possible that the high-flying stock could still perform pretty well over the near term.
However, long-term investors must focus on -- unsurprisingly -- the long term. And it's the long term where things get murkier for AMC, in my view. I'm doubtful that the company will have strong and sustainable growth after it fully recovers from the effects of the pandemic.
On the other hand, there are other companies that should have tremendous long-term prospects. These businesses will not just profit as COVID-19 concerns hopefully diminish; they're built to continue growing for years to come. Here are three unstoppable stocks to buy instead of AMC.
Amazon.com
What are technologies that will almost certainly be even more widely adopted in the future? I'd put artificial intelligence (AI), e-commerce, self-driving cars, streaming TV, and telehealth on the list, for sure. Amazon.com(NASDAQ:AMZN)is targeting each of these areas.
"Targeting" is really too weak of a word to use with respect to Amazon's e-commerce business. The company reigns as the 800-pound gorilla in e-commerce with online sales of $52.9 billion in the first quarter, up 41% year over year. But e-commerce comprised only 13.4% of total U.S. retail sales in Q1, giving Amazon plenty of opportunities for growth.
Amazon's most obvious AI product is its Alexa virtual assistant. However, the company is probably making the most impact on AI adoption with its Amazon Web Services (AWS) cloud hosting unit. Nearly 90% of AI deep learning projects on the cloud are hosted on AWS.
Perhaps the best reason to invest in Amazon is that it has a wide range of growth opportunities. One that I'm especially watching closely is the company's move into healthcare. Amazon has already launched an online pharmacy and is ina good position to become a leader in telehealthwith its new Amazon Care service.
Brookfield Renewable
Another unstoppable trend that could make long-term investors a lot of money is the increased use of renewable energy sources. Countries across the world have established ambitious goals for reducing carbon emissions. So have major corporations (including Amazon). Brookfield Renewable(NYSE:BEP)(NYSE:BEPC)stands out as one of the bestrenewable energy stocksto buy.
Brookfield Renewable operates nearly 6,000 power generation facilities across four continents with a combined capacity of roughly 21,000 megawatts. Around 62% of the company's capacity comes from hydroelectric power, but Brookfield Renewable is increasing its wind and solar portfolio.
The company thinks it can deliver annual total returns of close to 15% over the long term. That goal seems attainable considering that Brookfield Renewable has achieved an 18% average annual total return over the last two decades and has a development pipeline that could more than double its current capacity.
Brookfield Renewable also offers something that neither AMC nor Amazon do -- a strong dividend. Its dividend yield currently stands at close to 3%. The company has increased its distribution by a compound annual growth rate of 6% since 2000.
Intuitive Surgical
There's another unstoppable trend that you probably don't think about very much. The use of robotic surgical systems continues to grow. Intuitive Surgical(NASDAQ:ISRG)is the indisputable leader in this market.
Like AMC, Intuitive Surgical faced headwinds from the COVID-19 pandemic although its challenges weren't nearly as great as those of the theater chain. The good news for Intuitive is that procedure volumes continue to rebound strongly.
Just how much can Intuitive grow? The company estimates that around 6 million procedures are performed annually where it already has products and regulatory clearances. In 2020, Intuitive's robotic systems were used in a little over 1.2 million procedures.
Even better, Intuitive Surgical continues to introduce new products that expand the types of procedures for which robotic assistance can be used. Close to 20 million soft tissue surgeries are performed each year. Over time, Intuitive could be in a position to target all of these procedures.