Trade-offs: Every investor must make them. You trade off higher levels of risk for the potential to hopefully get higher returns. Every stock you buy involves a trade-off as well. You’re using money that could have been invested in another stock.
Tesla‘s (NASDAQ: TSLA) share price has plunged roughly 70% below its previous high. This steep sell-off no doubt has some investors thinking about buying the beaten-down electric vehicle stock.
Maybe that’s a good move. However, remember that you’re making a trade-off in buying Tesla. There are plenty of other great opportunities you could invest in. Here are three no-brainer stocks to buy for less than the cost of one Tesla share.
1. Brookfield Infrastructure
I suspect that few investors would view infrastructure stocks as having the same growth opportunities as EV stocks such as Tesla. Don’t forget Aesop’s fable about the tortoise and the hare, though. The steady-going tortoise ultimately beat the erratic hare in that race.
Brookfield Infrastructure (NYSE: BIP) (NYSE: BIPC) just might be akin to Aesop’s fabled tortoise. The company certainly has the steady-going part down pat. Brookfield Infrastructure owns a diversified portfolio of infrastructure assets, including utilities, railroads, toll roads, pipelines, cell towers, and data centers, that generate reliable cash flow, month in and month out.
The company returns a nice chunk of that steady cash flow back to its shareholders (or unit holders, for those who invest in its limited partnership) through distributions. Brookfield Infrastructure has increased its distribution by a compound annual growth rate (CAGR) of around 10% since 2009. It expects to continue growing the distribution by at least 5% to 9% per year on average.
Brookfield Infrastructure’s stock has delivered solid long-term returns, even without those distributions. The company should have significant opportunities for future growth thanks to digitization, decarbonization, and deglobalization trends.
2. Brookfield Renewable
There’s another company with Brookfield in its name that stands to benefit from the decarbonization trend. Brookfield Renewable (NYSE: BEP) (NYSE: BEPC) ranks as a leading provider of renewable energy. Its connection with Brookfield Infrastructure is that they both share the same general partner and part owner — Brookfield Asset Management.
Brookfield Renewable owns and operates hydroelectric, wind, solar, and distributed power generation facilities across the world. Combined, these facilities have an operating capacity of 24 gigawatts, with hydro making up a little over half of this total.
That said, the company’s development pipeline could more than quadruple its capacity. This pipeline is also much more heavily focused on solar, wind, and distributed energy, all of which should enjoy strong demand for years to come.
Like Brookfield Infrastructure, Brookfield Renewable rewards investors with a steady distribution. The company has increased its distribution by a CAGR of around 6%. It expects to deliver total returns, including share appreciation and distributions, of between 12% and 15% over the long term. With that level of total return, this stock could easily double your money in less than seven years.
3. The Trade Desk
Buying one share each of Brookfield Infrastructure and Brookfield Renewable would cost you around $64 right now. You’d still have plenty of money remaining compared to buying one Tesla share, which currently costs around $122. Scooping up a share of The Trade Desk (NASDAQ: TTD) at roughly $47 would leave you with cash to spare compared to investing in Tesla.
The Trade Desk operates a digital advertising platform for ad buyers. It’s highly profitable — and has been since 2013. The company’s revenue has also skyrocketed thanks to a major transition to digital advertising.
Sure, the stock was hammered hard last year, with macroeconomic headwinds impacting the advertising business. But The Trade Desk could make a strong recovery in 2023 as it scales up its operations.
Three areas especially present big opportunities for The Trade Desk to grow. Connected TV (CTV) offers advertisers better bang for the buck. And CTV continues to expand as more streaming services offer ad-supported models.
The company has significant growth potential by increasing its international presence. Also, shopper marketing (focusing on all the ways brands present themselves to online shoppers) is a key growth driver for The Trade Desk.
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Keith Speights has positions in Brookfield Infrastructure, Brookfield Infrastructure Partners, Brookfield Renewable, Brookfield Renewable Partners, and Trade Desk. The Motley Fool has positions in and recommends Brookfield Asset Management, Brookfield Renewable, Tesla, and Trade Desk. The Motley Fool recommends Brookfield Infrastructure Partners and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.