As we move into 2024, it is clear that the market and the world in general is changing quickly. The ability to adapt and to change with the times is a necessity. How does that happen in the investing world? Doing very careful research into stocks, exchange-traded funds and other investment vehicles for growing income in 2024 and beyond. Read on for a shortlist of quality growth stocks in which to consider investing.
Why Growth Stocks?
A growth stock is a share in a company predicted to grow earnings and sales at a rate above the average for the broad stock market. These companies tend to be more focused on growth than paying out a large portion of their earnings as dividends.
The most prominent growth companies often have a loyal customer base and/or a significant market share of their industry. Investors can potentially make money investing in growth stocks through selling shares in the future if they’ve gone up in value. Of course, since these are still stocks, there is always the risk of the shares dropping value and the investor losing money. The goal in investing in growth stocks is to carefully research and identify businesses with the potential to sustainably grow capital for years into the future, especially if you are thinking about your retirement needs.
Methodology For These Growth Stock Picks
In a stock market that has been very focused on a small number of very large companies, my aim was to look elsewhere, with an emphasis on quality, stability and consistency. I started with the 100 largest components of the S&P 500 Index and assembled a list that would contain no more than one stock from any economic sector. I analyze several traditional fundamental metrics based on earnings, sales, cash flow and price analysis. I took a 2-3 year outlook in doing so, and emphasized finding true leaders in their industries, with significant insulation from competition, or what Warren Buffett calls “wide moat” businesses.
Valuation was a consideration here, but not nearly to the extent that it has been in my value and dividend-focused articles this year. Growth stock valuations are extremely high, and so in my view, selecting growth stocks in that investment climate requires looking toward companies that have potential to grow into those above-average valuations because they can continue to increase earnings and sales at a fast enough clip to accomplish that.
The brain trust at Forbes has run the numbers, conducted the research, and done the analysis to come up with some of the best places for you to make money in 2024. Download one of Forbes’ most popular and widely anticipated reports, 12 Best Stocks To Buy for 2024.
The 3 Best Growth Stocks For 2024
These three growth stocks; BlackRock
BLK
YCharts
1. Blackrock (BLK)
- Industry/sector: Asset Management and Custody Banks/Financials
- Market cap: $112 billion
- Stock Price: $757.40
- Dividend Yield: 2.7%
- Trailing Price/Earnings Ratio: 21.3
- Trailing Price/Sales Ratio: 6.5
Company Overview
BlackRock is a publicly owned investment manager. Founded in 1988 and based in New York City, with offices across the globe, BlackRock is the largest asset manager in the world with more than $9 trillion worth of assets under management.
Why It Is A Top Pick
BlackRock is the biggest issuer of exchange-traded funds (ETFs) by far, and its most recent application for a spot bitcoin ETF is drawing investors attention, since it would be the first of its kind if approved by the SEC, something that has a high possibility of happening in early 2024.
YCharts
2. Salesforce (CRM)
- Industry/sector: Application Software/Information Technology
- Market cap: $248 billion
- Stock Price: $256.23
- Dividend Yield: None
- Trailing Price/Earnings Ratio: 97.4
- Trailing Price/Sales Ratio: 7.4
Company Overview
Salesforce is one of the most recent additions to the Dow Jones, and started back in 1999 as a pioneering company of subscription based “software as a service,” offering customer relationship management (CRM), with both the software and the data hosted on the internet– truly groundbreaking innovation for the early 2000s. Throughout the 2010s, Salesforce grew by acquisitions of small start-ups and is now the third largest enterprise software company, behind Microsoft
MSFT
ORCL
Why It Is A Top Pick
As a large company in the 2020s, its time of growth by acquisitions has slowed but Salesforce has successfully pivoted to continue to grow in value by increasing profit margins.
YCharts
The brain trust at Forbes has run the numbers, conducted the research, and done the analysis to come up with some of the best places for you to make money in 2024. Download one of Forbes’ most popular and widely anticipated reports, 12 Best Stocks To Buy for 2024.
3. Nike (NKE)
- Industry/sector: Footwear/Consumer Discretionary
- Market cap: $182 billion
- Stock Price: $119.85
- Dividend Yield: 1.3%
- Trailing Price/Earnings Ratio: 37.0
- Trailing Price/Sales Ratio: 3.6
Company Overview
Nike was founded in 1964 as Blue Ribbon Sports and was renamed Nike in 1971. The company struggled after going public in 1980, until signing a deal with Michael Jordan in 1984, revolutionizing sports marketing and launching Nike into international recognition. Through acquisitions and sports celebrity endorsements, Nike has become the largest supplier of athletic shoes and apparel, with a 2023 fiscal year revenue of more than $51 Billion.
Why It Is A Top Pick
Over its long history Nike has been affected by many ups and downs, and the past couple of years have been exceptionally bumpy, due to pandemic-related shutdowns of factories, followed by a surge of stock, while consumer spending dropped in 2022. Since then, Nike has been working on regaining its footing, reducing its overstock and looking to accelerate growth heading into 2024 through leadership changes, and restructuring within the company.
YCharts
Investing Strategies To Position For Success
Successful investing doesn’t happen overnight. Investing is a mix of science and art, and the understanding, dedication and research of the investor will make a difference in the success of long-term investment strategies. Investors need to understand their personal goals, risk tolerance and future needs for capital and create a strategy to mitigate risk and reach their goals.
Whether the strategy is aggressive, passive or a mix of both, long-term or short-term, will depend on the investor. The bottom line: Each investor needs to do his/her research and create an individual strategy, with the assistance of professionals if desired.
Bottom Line
Growth stocks carry risk, like any stock in the market does, but the three stocks discussed in this article are worth considering for investing in 2024, once you’ve done your own, thorough research. This is a trio of quality companies that stand out in their industries and have a track record of being able to adapt to changing markets and circumstances, enabling them to survive market fluctuations and return profit to their investors.
Read Next
- 10 Best Tech Stocks For 2024
- 2 Most Undervalued Stocks To Watch
- Index Funds Vs. Mutual Funds: Understanding The Key Differences
The brain trust at Forbes has run the numbers, conducted the research, and done the analysis to come up with some of the best places for you to make money in 2024. Download one of Forbes’ most popular and widely anticipated reports, 12 Best Stocks To Buy for 2024.