High-growth tech stocks have taken a hammering after going through a dream run last year. After undergoing a tremendous surge in 2020, tech stocks have been on the retreat this year. The market has punished companies that are not making any profit.
With vaccination campaigns in full swing in some of the world’s biggest economies, the world is taking baby steps towards normalcy. So, as a young investor with $1000 to invest, this could be an opportunity to add quality stocks to your portfolio.
While tech sell-off has given a buying opportunity, that is not the only sector that should garner your attention. A combination of high-growth tech stock with a high dividend-yielding stock should be the way to go. Here’s why Lightspeed POS (TSX:LSPD)(NYSE:LSPD) and BCE (TSX:BCE)(NYSE:BCE) fit the bill.
Lightspeed POS stock surged 13% since it reported earnings before undergoing a brief correction. Over the past year, the stock has gained a staggering 145%. The Software-as-a-Service company serves single- and multi-location small and medium-sized businesses. Apart from point-of-sale systems, Lightspeed offers multiple business solutions.
When lockdown ensued, and businesses closed down last year, Lightspeed’s revenues took a hit. Brick and mortar stores and hospitality businesses suffered. Despite that, investors’ faith made sure that the stock soared over the past year. This was because of the company’s potential for revenue growth in the coming years.
One of the most important metrics to measure this company’s potential growth is the number of customer locations. Many of its customers usually opt for one of its services, and Lightspeed has the opportunity to cross-sell more products to those customers. Some customers have stores in multiple locations, including e-commerce stores. This offers an opportunity for market penetration. At the end of Fiscal 2021, over 140,000 customer locations were utilizing one of its platforms.
Lightspeed’s Net Dollar Retention Rate is 100%, which indicates that the customers acquired tend to be loyal. A loyal customer base and a chance to cross-sell multiple services represent a superb opportunity to grow for the company in the coming years.
Bell Canada Enterprises (BCE) owns the majority of Canada’s telecom infrastructure. An outstanding dividend stock, BCE could walk into any portfolio. If your portfolio is heavy on high-growth stocks, a dividend stock like BCE will be a great addition. The company offers crucial services like wireless broadband, telecommunication, cloud, and internet of things support. This makes the company’s revenue streams stable.
The stock has delivered a stellar dividend yield of 5.85% CAGR, capital appreciation of 340% in stock price, and a 140% increase in dividend yield over the last decade. The stock is currently flirting with its 52-week high of $60.44. The 5g revolution is looming right around the corner, and BCE is poised to benefit from it.
As a long-term investor, the dividend yield will offer you a source of income along with an opportunity to benefit from capital appreciation.
If you are building a long-term portfolio, you can accumulate both stocks on dips. If you are building a defensive portfolio, allocate 75% towards BCE. This will ensure an income through dividends and also make your investment crash-resistant. If you have a higher risk tolerance, you could allocate 75% to Lightspeed. Slow accumulation on dips would be a perfect way to build your portfolio.