Dating stocks are on a tear in 2017, even though the mainstream media still thinks dating stocks are a novelty despite the double-digit profits they are bringing investors.
But the industry is on the verge of going mainstream...
So far in 2017, both of the dating stocks we are about to mention have climbed over 46%. In comparison, the Dow Jones Industrial Average is up just 14.58%.
You see, online dating is still a growing industry, because there's a huge untapped market. And for forward-thinking investors, that means the profit opportunity is just getting started...
Why More Gains Are Ahead for Dating Stocks in 2018
According to StatisticBrain.com, there are over 2 million annual U.S. marriages. But according to a 2015 Pew Research Center study, only 5% of married couples or couples in a committed relationship said they met each other online.
That means only 100,000 people who got married in 2015 met online. That's changing in a hurry.
Thanks to evolving views on Internet dating, meeting a spouse online is becoming much more common.
In a 2005 Pew Research Center study, only 44% of those polled believed online dating was a good way to meet people. But just 10 years later, Pew found 59% of people surveyed thought online dating was a good way to meet people.
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And these changing views are going to lead to a boom in online dating users...
There are expected to be a total of 291.8 million online dating users in 2017. By 2021, that will climb 15% to 338 million, according to Statista.
Now, 15% may not sound like a lot. But we are still in the early stages of Internet dating becoming more socially accepted. That means there is growth potential as online dating becomes mainstream.
While the industry is growing, there's simply no time to wait to invest in this emerging industry, because the biggest gains will be made by those who own dating stocks now.
That's why we had to make sure these two dating stocks were on your radar right now...
For These Dating Stocks, Double-Digit Profits Could Just Be the Start
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The first dating stock to watch in 2018 is Spark Networks Inc. (NYSE American: LOV). It's best known for its Jewish dating network, JDate, and Christian network, ChristianMingle.com.
And this niche approach compared to a broad approach to connecting singles is working...
According to its site, ChristianMingle has 13-million registered members, and JDate has over 750,000 worldwide members.
Now, Spark stock is a speculative investment because it's a penny stock that trades for $1.22. The company also reported a net loss of $2.5 million in Q2 2017.
However, on May 2, the company entered into a definitive agreement with Affinitas GmbH to combine in a stock-for-stock merger. Affinitas is a German subsidiary of Spark, and it operates online dating sites eDarling and SHOPAMAN.
The deal is supposed to finalize at some point in Q4 2017, and the new entity will be listed on the NYSE. As of right now, LOV shareholders will own 25% of the new company.
According to Reuters, the new company is expected to generate between $118 and $122 million in revenue in 2018. In comparison, Sparks has generated a total of $13.9 million on its own thus far in 2017.
So far in 2017, the LOV stock price has traded between $0.76 and $1.68 per share, but it has climbed 48.02% this year, while the Dow is up just 14.58%.
The second dating stock to watch heading into 2018 is Match Group Inc. (Nasdaq: MTCH). Its most well-known holding, Match.com, has over 21-million users.
Match Group operates a total of 45 dating brands, which include Tinder, PlentyofFish, BlackPeopleMeet, and OkCupid.
And thanks to a dominant hold on the online dating industry, revenue is surging.
For Q2 2017, revenue totaled $309.86 million, and earnings per share (EPS) totaled $0.17. That's a 12% year-over-year increase for revenue and a 21% increase for EPS.
And along with growing revenue, the MTCH stock price has climbed 47.08% so far in 2017.
Looking ahead, the company said in its earnings call on Aug. 2 that it sees India, Brazil, and Russia as emerging markets. Also, the company is testing new subscription packages with Tinder.
Over the next 12 months, Aegis Capital Corp. has a one-year price target of $29 for the MTCH stock price. From today's opening price of $24.97, that's a potential gain of 16.1%.
However, as more and more people sign up for Internet dating, that could end up being too conservative of an estimate.
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