Stocks to buy

3 E-Commerce Stocks That Could Deliver Packages of Profits

E-commerce has changed the way we shop, and while there are several brick-and-mortar stores in the industry, many consumers prefer online shopping. Companies have diversified their businesses and are no longer limited to selling products online. With a wide umbrella of products and services, these e-commerce companies are set to thrive as the macroeconomic situations improve. If you are looking for long-term e-commerce stocks, you need to look for companies that manage to grow, even in times of inflation. These are the companies that provide value to customers and will have an excellent 2024.

E-commerce Stocks to Buy: Amazon (AMZN)

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I see myself writing about Amazon (NASDAQ:AMZN) every week. This e-commerce stock has built a diversified business and offers so much more than online shopping today. The tech giant had a modest start as a bookseller and now sells everything you can think of.

As consumers move towards online shopping, Amazon is expanding its market share and thriving with an improvement in consumer spending. Its net sales increased 14% YOY to hit $170 billion in the fourth quarter. It saw a record-breaking holiday shopping season and is ready for an exceptional year.

With companies cutting down on physical stores, Amazon is gaining market share. It has a global presence and a market share of 37% in the U.S. The company has enough liquidity to keep investing in the business, and it takes the right moves to ensure high customer satisfaction.

That increases loyalty and brings repeat customers. Amazon has integrated AI into the business, which helps with logistics and product recommendations and offers an improved shopping experience.

The company aims to expand Prime Air drone deliveries to the U.K., Italy and one location in the U.S. by the end of this year. It makes huge money from its Prime and e-commerce businesses, driven by sale events and holidays. It is kicking off a Spring Sale event tomorrow.

If you look at the larger picture, Amazon is much more than an e-commerce business. It has a thriving cloud computing, streaming and advertising business, which will help improve the top and bottom lines. Trading at $174, the stock could hit $200 in the coming months. AMZN is one of the top e-commerce stocks to own.

Walmart (WMT)

Consumers still love Walmart (NYSE:WMT) because it is one of the very few companies with physical stores while keeping pace with e-commerce growth. Walmart has a presence across 19 countries and has been working on expanding its e-commerce services.

The company has a subscription plan that competes with Prime. Its subscription offers free deliveries, same-day deliveries, discounts and a subscription to a streaming service. It has also launched an on-demand early morning delivery to gain an edge in the industry.

WMT stock is at the 52-week high and is trading at $60. The stock has soared 16% year-to-date and is up 30% in the year. It reported impressive numbers in the fourth quarter — like its competitors. The sales reached $173 billion, up 5.7% YOY and the EPS came in at $1.80. It surpassed $100 billion in revenue.

Like Amazon, Walmart has also seen an improvement in the advertising business, which soared nearly 30% YOY, driven by its recent acquisition announcement of Vizio Holdings (NYSE:VZIO). Despite concerns about inflation, Walmart has been standing strong in the industry and could have a better 2024 due to its diverse income streams.

As one of the largest retailers in the world, the company has been in the business for over six decades and has seen it all. While Amazon and Walmart are similar businesses, Walmart is a dividend-paying company. It believes in rewarding shareholders and has been increasing dividend payouts for the past 50+ years. With a dividend yield of 1.36%, Walmart is one of the best e-commerce stocks for passive income investors.

Costco (COST)

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A well-known name in the industry, Costco (NASDAQ:COST) charges an annual fee from members to shop at its warehouse and has a wide range of product offerings. The one thing that sets it apart from the other businesses is the attractive prices.

Costco has managed to attract new members, ending 2023 with 73.4 million members. The company hasn’t increased membership fees since 2017 and it doesn’t plan to hike the fees — yet.

Fundamentally, the company is in a very strong position and has managed to grow profits and revenue. In the second quarter, it reported a revenue of $58.4 billion, up 5.7% YOY, and the net income hit $1.74 billion. The e-commerce sales grew 18.4% YOY, and the comparable sales increased 5.6% YOY. It is investing in the e-commerce platform and has made changes to its website to improve customer experience.

The growth in membership shows that consumers find its membership program worthwhile, helping to improve profitability. COST stock has been steadily moving upwards over the past year and is trading for $731 today. It has soared 50% in the year and is up 12% YTD.

The membership-only company benefits from the core customers who have stuck to Costco for years and have found value for money. This blue-chip stock could continue moving in an upward direction and is worth adding to your portfolio.

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.