The fairer sex has always been a mystery to me and my fellow nerds. I never learned to talk the talk and walk the walk. Instead, throughout much of my high school career, I focused my energy on AP classes and SAT prep courses. Honestly, without online dating, I’d be well on my way to becoming a real-life “40-year old virgin.” And this is exactly why investors need to take a close look at dating stocks!
When the concept of online meet-ups was born, only nerds appreciated it. According to the Pew Research Center, 29% of dating survey respondents in 2005 felt that online relationships were for “desperate” people. Ten years later, that figure declined to 23%.
More critically, a majority of Americans (59%) had a positive attitude towards online dating in 2015. This sentiment contrasts sharply from 2005, when only 44% felt that way.
The shift in public opinion positively impacted dating stocks. In the olden days, online meet-ups were haphazard affairs. Today, the entire industry has taken on an almost scientific professionalism. Companies like eHarmony advertise their proprietary compatibility solutions to facilitate long-term relationships. Others boast of their extensive user base. All are featured prominently on social and traditional media.
Thanks to the early pioneers’ extensive efforts, finding love on the internet no longer has much stigma. As a result, online matchmaking companies are a great portfolio boost. Here are three dating stocks that will get more love than you think!
Hot Dating Stocks: Match Group (MTCH)
Among dating stocks, no name stands out more than Match Group Inc (NASDAQ:MTCH). With more than 21 million users, Match covers a significant portion of singles in America. In addition, MTCH is running aggressive TV advertisement campaigns, which further normalizes online dating.
Match differentiates itself from “specialist” matchmakers through its everyman (and woman) approach. For instance, eHarmony leans conservative, and therefore, does not support alternative lifestyles. In contrast, MTCH opened its doors to LGBTQ profiles.
To further their reach, Match owns several dating sites that cater to specific communities or trends.
Year-to-date, MTCH stock has gained almost 10%, and will be looking to add more. Since 2012, Match revenues have grown annually 14.5%. Momentum remains strong, with sales growth hitting 18% over the past four quarters. More importantly, profitability margins for MTCH are climbing back towards multiyear records.
Thanks to a positive cultural shift and a proven business model, Match Group has a bright future ahead.
Hot Dating Stocks: Spark Networks (LOV)
While Match casts as wide of a net as possible, competitor Spark Networks Inc (NYSEMKT:LOV) takes a more selective approach. The company’s first foray into online matchmaking was JDate, which later became “the leading online community for Jewish singles.” One of their other notable businesses is ChristianMingle, which fosters traditional, faith-based relationships.
Although faith in the information age may sound anachronous, religious compatibility is critical for healthy relationships. According to a New York Timesop-ed, “interfaith marriages often come with a heavy price. They are more likely than same-faith unions to be unhappy and, in some circumstances, to end in divorce.”
Rather than promote disharmony, LOV aims for quality over quantity.
Admittedly, this approach hasn’t worked out that well compared to rival dating stocks. Over the past five years, Spark Networks has lost a shocking 85% in market value. That said, shares are up 10% YTD, and I believe it has a solid chance of moving higher. Spark Networks has zero debt on its books, and is laser-focused on its niche markets.
Faith-based dating is a largely untapped opportunity. If LOV can find a way to disassociate itself from some of the seedier elements of online dating, it can really surprise investors.
Hot Dating Stocks: Meet Group (MEET)
Among the dating stocks featured on this list, Meet Group Inc (NASDAQ:MEET) falls nicely in the middle. Meet Group’s mission purpose is different from the “hook-up” mentality found in Match. However, it also lacks the pressure of marital commitment that underlines a Spark Networks’ connection. In other words, MEET facilitates light-hearted, natural introductions with the possibility of something greater.
If you think what Meet Group is cooking up sounds enticing, you’re not alone. The company boasts more than 2.5 million daily active users, so you don’t have to worry about fake profiles. More than 130,000 people become new members on a daily basis. Finally, MEET users collectively send 60 million chat messages every day, which indicates high network integration.
From an investor’s perspective, MEET is a match made in heaven. Unlike other dating stocks, the company has broadly balanced financials. It has a debt-free balance sheet, one of the best profitability margins in the industry and an attractive valuation.
Because of its cash-rich position, MEET has a lot of options on the table. Don’t be surprised to see this company go places!