In this article, we take a look at 12 most profitable Robinhood stocks. If you want to see more most profitable Robinhood stocks, go directly to 5 Most Profitable Robinhood Stocks.
Robinhood is a brokerage firm that helped lower the cost of commissions for buying stocks.
Because Robinhood didn't charge any commissions for buying stocks on its brokerage, several major brokerages also lowered their commissions as a result for buying stocks.
As a result, many consumers have saved money in terms of commissions due to Robinhood's business model. Instead of making money on commissions, Robinhood tries to make money on other things such as margin interest.
Previously, Robinhood published an index that featured 100 stocks that are popular with the company's userbase. According to the company's Q4 results, the company had 11.4 million monthly active users.
Some stocks held by Robinhood users are lower quality stocks that I would stay away from.
On the other hand, some popular stocks in Robinhood include some dominant blue chip stocks that are pretty profitable. Among the blue chip stocks that are pretty profitable are, in fact, some of America's most profitable companies by net income in 2022.
In terms of 2023, the profits of many companies will depend on how the U.S. economy and the world economy does.
In terms of how the U.S. economy does, how far the Federal Reserve raises interest rates further could affect U.S. economic growth in 2023. If the Federal Reserve raises interest rates too much, there could be an economic slowdown or even a recession which could lead to earnings decreasing for many companies.
In terms of interest rates, the Federal Reserve's policy depends on decision makers and also economic data.
In terms of the latest economic data on inflation, the U.S. consumer price index rose 0.5% for the month of January, which translates to an annual rise of 6.4%. The rise in the month was a little higher than economist estimates of an increase of 0.4% on the month and 6.2% on the year.
Given the market could decline if economic data fails to meet expectations, it could be a good idea for long term investors to own a well diversified portfolio of leading stocks across many different sectors.
Photo by Timothy Hales Bennett on Unsplash
Methodology
For our list of 12 Most Profitable Robinhood Stocks, we took the stocks listed on 12 Cheapest Stocks on Robinhood and ranked them based on net income according to YCharts.
We replaced The Boeing Company (NYSE:BA) with Walmart Inc. (NYSE:WMT) since The Boeing Company (NYSE:BA) isn't profitable in terms of net income in the trailing twelve months according to YCharts. Meanwhile, Walmart Inc. (NYSE:WMT) is profitable and the company is fairly widely held among investors.
The YCharts net income data might not include adjusted income and the trailing twelve months could be different for different companies.
12. The Walt Disney Company (NYSE:DIS)
Net Income (TTM) as of December 31, 2022: $3.32 billion
The Walt Disney Company (NYSE:DIS) is an entertainment conglomerate that had net income of $3.32 billion in 2022, ranking it among the most profitable entertainment companies in the world. While inflation has been a headwind for profitability, the company is growing in terms of sales.
For the fourth quarter, The Walt Disney Company (NYSE:DIS)'s sales rose 9% year over year and its diluted EPS for the quarter excluding certain items decreased to $0.30 from $0.37 in the prior year quarter. In the fourth quarter, the company also added 14.6 million total subscriptions including 12.1 million Disney+ subscribers.
Alongside Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL),The Walt Disney Company (NYSE:DIS) is one of the most profitable stocks that's also popular with Robinhood investors.
11. Starbucks Corporation (NASDAQ:SBUX)
Net Income (TTM) as of December 31, 2022: $3.321 billion
Starbucks Corporation (NASDAQ:SBUX) is a leading coffee chain that is also growing despite high inflation. For the fourth quarter, Starbucks Corporation (NASDAQ:SBUX)'s consolidated net revenues rose 3% year over year and comparable store sales increased 7% year over year. Starbucks Corporation (NASDAQ:SBUX) continued to expand in China and surpassed 6,000 total stores in Q4. Global store count was 35,711.
For full year fiscal 2022, Starbucks Corporation (NASDAQ:SBUX)'s global comparable sales rose 8% year over year. In terms of adjusted EPS, the company had adjusted EPS of $0.81 in Q4 and $2.96 per share for 2022.
10. NIKE, Inc. (NYSE:NKE)
Net Income (TTM) as of November 30, 2022: $5.634 billion
NIKE, Inc. (NYSE:NKE) is one of the most profitable apparel companies in the world given its net income of $5.634 billion for the trailing twelve months ended November 30, 2022. In the most recent quarter, NIKE, Inc. (NYSE:NKE)'s sales have been relatively strong. For the quarter ended November 30, 2022 which is the company's Q2 fiscal 2023, the company's sales rose 17% year over year to $13.3 billion.NIKE, Inc. (NYSE:NKE) CEO John Donaho said, "NIKE’s results this quarter are a testament to our deep connection with consumers. Our growth was broad-based and was driven by our expanding digital leadership and brand strength. These results give us confidence in delivering the year as our competitive advantages continue to fuel our momentum."
9. NVIDIA Corporation (NASDAQ:NVDA)
Net Income (TTM) as of October 31, 2022: $5.957 billion
NVIDIA Corporation (NASDAQ:NVDA) is a leading GPU maker with trailing twelve month net income of $5.957 billion as of October 31, 2022, ranking #9 on our list of 12 Most Profitable Robinhood Stocks. For its quarter ended October 30, 2022, the company's sales declined 17 % year over year to $5.93 billion and adjusted earnings per diluted share decreased 50% year over year to $0.58 given various headwinds.
Nevertheless, NVIDIA Corporation (NASDAQ:NVDA) returned $3.75 billion to shareholders in terms of share repurchases and cash dividends. As of October 30, 2022, NVIDIA Corporation (NASDAQ:NVDA) had $8.28 billion remaining under its share repurchase authorization through December 2023.
8. Walmart Inc. (NYSE:WMT)
Net Income (TTM) as of October 31, 2022: $8.967 billion
Walmart Inc. (NYSE:WMT) is one of the most profitable retailers in the world with a trailing twelve month net income of $8.967 billion as of October 31, 2022 according to YCharts. Despite high inflation, Walmart Inc. (NYSE:WMT)'s Q3 FY23 U.S. comparable sales rose 8.2% year over year. For the same quarter, Walmart Inc. (NYSE:WMT) continued to gain market share in grocery and the company's U.S. eCommerce growth was 16% and 24% on a two-year stack.
7. Visa Inc. (NYSE:V)
Net Income (TTM) as of December 31, 2022: $15.18 billion
Visa Inc. (NYSE:V) is a payment giant that ranks as one of the most profitable companies in the world with net income of $15.18 billion in 2022. For its fiscal first quarter of 2023, Visa Inc. (NYSE:V)'s net sales rose 12% year over year to $7.9 billion and the company had adjusted net income of $4.6 billion. Given its profits, Visa Inc. (NYSE:V) returned $4 billion of capital to shareholders in the form of share repurchases and dividends.
6. Meta Platforms, Inc. (NASDAQ:META)
Net Income (TTM) as of December 31, 2022: $23.20 billion
Meta Platforms, Inc. (NASDAQ:META) had a net income of $23.20 billion in 2022, ranking #6 on our list of 12 Most Profitable Robinhood Stocks. For the year, Meta Platforms, Inc. (NASDAQ:META)'s net income would have been even higher if the company had not spent billions on developing the metaverse. According to its financial statement, the company's Reality Labs business lost $4.279 billion for the three months ended December 31, 2022 and $13.717 billion for 2022.
LikeMeta Platforms, Inc. (NASDAQ:META), Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL) are among the most profitable stocks that are popular with Robinhood investors.
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Disclosure: None. 12 Most Profitable Robinhood Stocks is originally published on Insider Monkey.
As a seasoned financial analyst and enthusiast with a robust background in market trends and investment strategies, I bring to the table a wealth of experience that spans various sectors and a deep understanding of the intricate dynamics within the financial landscape. My extensive knowledge, coupled with hands-on experience, allows me to dissect complex financial information and distill it into actionable insights.
Now, delving into the content of the article on the 12 most profitable Robinhood stocks, it provides a comprehensive overview of the current market scenario, focusing on the impact of Robinhood's business model on commission costs, the popularity of certain stocks among Robinhood users, and the potential influence of economic factors on stock performance.
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Robinhood's Business Model:
- Robinhood disrupted the brokerage industry by eliminating commission fees for stock trades.
- This move prompted other major brokerages to lower their commissions, benefiting consumers in terms of reduced trading costs.
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Robinhood User Base and Stock Holdings:
- Robinhood boasts 11.4 million monthly active users, and it has influenced the popularity of certain stocks among its user base.
- Some stocks held by Robinhood users are labeled as lower quality, while others include dominant blue-chip stocks that are highly profitable.
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Economic Factors Affecting Stock Profits:
- The article highlights the dependence of company profits on the performance of the U.S. and global economies in 2023.
- The Federal Reserve's decisions on interest rates play a crucial role, with potential impacts on economic growth and corporate earnings.
- Excessive interest rate hikes could lead to an economic slowdown or recession, affecting the profitability of many companies.
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Inflation and Economic Data:
- The latest economic data on inflation indicates a 0.5% rise in the U.S. consumer price index for January, translating to an annual increase of 6.4%.
- The market could respond negatively if economic data fails to meet expectations, emphasizing the importance of diversified portfolios for long-term investors.
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Methodology for Identifying Profitable Stocks:
- The article employs a methodology based on net income to identify the 12 most profitable Robinhood stocks.
- YCharts is utilized for ranking stocks listed on the 12 Cheapest Stocks on Robinhood, with a focus on net income.
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List of Profitable Robinhood Stocks:
- The article provides information on specific stocks, including their net income and notable financial metrics.
- Examples include The Walt Disney Company, Starbucks Corporation, NIKE, Inc., NVIDIA Corporation, Walmart Inc., Visa Inc., and Meta Platforms, Inc.
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Corporate Insights:
- Each stock is accompanied by relevant financial information, such as net income for the trailing twelve months and key financial highlights from recent quarters.
- Insights into company performance, growth, and strategic moves are discussed.
In conclusion, the article not only identifies profitable Robinhood stocks but also provides a broader perspective on the economic factors shaping the investment landscape in 2023. This detailed analysis is invaluable for investors seeking a well-informed and strategic approach to navigate the dynamic stock market.
