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The 1 Stock I'd Buy Right Now
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The 1 Stock I'd Buy Right Now

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If I could only buy shares of one stock, the one I'd choose is Amazon.com (NASDAQ: AMZN). There are certainly other companies that seem likely to grow much more briskly, and companies that pay dividends -- while Amazon doesn't do so (yet) -- but Amazon has a heck of a lot to like about it, and its shares recently seem appealingly priced too.

Here's a closer look at the company, and why I'm attracted to it.

Image source: Getty Images.

More than an e-commerce giant

Amazon is much more than just an online marketplace you visit to buy all kinds of things. Here are just some of the many other operations under its roof:

  • Whole Foods Market: a familiar upscale grocery chain
  • Amazon Web Services (AWS): a major cloud computing service platform
  • Zappos: a premiere online footwear and apparel retailer
  • Amazon Robotics: robotic and automation technology
  • Amazon Pharmacy: features the prepackaged doses of PillPack
  • Twitch Interactive: a live-streaming video platform, with some 140 million monthly active users as of 2020
  • Kindle: a major e-reader platform
  • Alexa: a personal assistant powered by artificial intelligence
  • Amazon Prime: a multifaceted membership program offering video, books, music, and more
  • GoodReads: social media for lovers of books
  • Audible: audiobooks
  • Ring: home security equipment and services
  • Fire tablets, Fire TV, and Echo: Amazon's own hardware devices

Growth potential

With a recent market value of $1.6 trillion, Amazon is one of the most valuable companies on earth. Yet it's still able to grow at an impressive clip. In its last fiscal year, total revenue grew by a whopping 38%. That growth is likely to continue for the foreseeable future, too.

Many of Amazon's businesses and initiatives are likely to deliver growing dividends -- such as Amazon Logistics, which is the transportation network that's beefing up its fulfillment centers and delivery capabilities to deliver more and more of the company's goods instead of relying on UPS, FedEx, or the U.S. Postal Service to do much of this work. It's kind of easy to imagine Amazon delivering for other companies and entities in the future, too.

Image source: Amazon.

The supermarket realm is clearly a massive one, and it's another industry that Amazon is growing in, in part via its wholly owned Whole Foods Market and also with its newer Amazon Fresh outlets, which target more mainstream grocery shoppers. With the pandemic putting lots of stores out of business, Amazon has an opportunity to snap up valuable real estate for future Amazon Fresh locations. Many other Amazon operations have great growth potential, too, such as Amazon Pharmacy.

Another very promising growth driver for Amazon is international expansion. For example, it's establishing itself in India, where it's partnering with tens of thousands of sellers across hundreds of cities -- and India has a lot of cities, with a total national population recently topping 1.3 billion.

Unionization

Of course, no company or stock is bulletproof, offering guaranteed growth. Every company faces at least some risks, and one that Amazon is facing now is the threat of unionization, as warehouse workers in Alabama are trying to unionize.

Yes, a unionized workforce will likely demand better working conditions and more pay, but that may not be all bad for Amazon. For one thing, it has deep pockets and can meet demands. Meanwhile, if these labor-intensive jobs become more attractive to workers, employee turnover is likely to shrink, which can save the company money. And if Amazon is a generous employer, that may put pressure on smaller companies chasing the same workforce -- which could serve Amazon well while potentially hurting small businesses.

The price is right

Best of all, this growth stock is trading at a quite reasonable price. Its recent price-to-earnings (P/E) ratio was a lofty 76, but that's far less than its five-year average of 156. Similarly, its recent price-to-cash flow ratio of 24 is well below its five-year average of 31. Amazon stock has seemed very overvalued for much of its existence, but it has kept blowing through expectations, growing rapidly. Those who have waited for a more obvious bargain price have often waited years.

Give Amazon stock some consideration for a spot in your portfolio. It offers a lot of growth potential and diversification.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Selena Maranjian owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and FedEx. The Motley Fool recommends the following options: long January 2022 $1920.0 calls on Amazon and short January 2022 $1940.0 calls on Amazon. The Motley Fool has a disclosure policy.

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