The investing landscape can be daunting, and this is where steady growth stocks come in. Investors often find themselves chasing up-and-coming stocks, instead of investing in high quality growth companies.
They will often ask “what is the next Tesla (NASDAQ:TSLA) or Nvidia (NASDAQ:NVDA)?” While this isn’t necessarily a bad thing, it can lead to both disappointment and colossal losses. It’s important to invest into companies with strong moats and a history of growing revenue, EPS and returning cash to shareholders. These companies will probably not be the next big thing, but their track record can lead to slow and steady gains overtime.
Now, let’s discover the three best steady growth stocks to buy in February 2024!
Marriott International (MAR)
Marriott International (NASDAQ:MAR) reigns supreme in the global hospitality industry, boasting nearly 8,700 properties in 139 countries. The stock has nearly doubled over the last 5 years, driven by strong revenue, EPS and FCF growth. However, that is just one of the reasons why this hospitality giant has more upside through 2030.
During the Covid-19 Pandemic, the hospitality sector was crushed by stay at home orders. Only a few years later, inflation and higher interest rates would persist throughout the global economy, tempering demand. However, consumer spending has remained strong despite tighter financial conditions. This is great news for Marriott, as the company bets on a rebound in international tourism in 2024.
In FY23, Marriott added 81,300 rooms globally, translating to net room growth of 4.5% YOY. Revenue per average room (RevPAR) increased 15%, with strong double digit growth in international markets. The company expects RevPAR to increase 3-5% in FY24, translating to adjusted EBITDA of approximately $5 billion. Investors should keep MAR stock on their radar when considering the best steady growth stocks to buy for 2024.
Automatic Data Processing (ADP)
Automatic Data Processing (NASDAQ:ADP) widely known as ADP has been a leader in human capital management for the last several decades. The company began its journey with automating payrolls, and now offers a comprehensive suite of HR, payroll and administrative services to over 1 million companies.
Beyond just payroll, ADP helps companies manage their entire workforce from talent acquisition and onboarding to benefits administration and tax compliance. The company’s cloud-based solutions help streamline complex HR processes and provide important insights on company data. ADP is truly a transformative business, and its financial performance and dedication of returning value to shareholders are two of its key attributes.
ADP closed off a strong 2023 fiscal year, and 2024 is already moving in the right direction. In its latest quarterly financial results, revenue increased 6% YOY to $4.6 billion. Adjusted EBITDA margin increased by 20 basis points to 24.6%, as customer retention and bookings remained strong. CEO Maria Black exceptional leadership and efforts continue to drive customer satisfaction. With a 10% CAGR in its dividend over the last decade, now is a great time to snap up shares for the long term.
PepsiCo (PEP)
PepsiCo (NASDAQ:PEP) is a leading multinational food and beverage company headquartered in Harrison, New York. Beyond its robust portfolio, the company also covers manufacturing, distribution and marketing of its products.
Some of PepsiCo’s most notable brands include Pepsi, Lays, Quaker, Gatorade, Doritos and Ruffles. It has recently started to diversify its product portfolio into healthier food options with the acquisition of BFY Brands in late 2019. However, what has been the most promising as of late is the strength it continues to see in international markets. This includes a 38% increase in operating profit in Latin America in the 2023 fiscal year.
Management remains confident in their ability to deliver growth in 2024. They have affirmed 4% organic revenue growth and 8% EPS growth. With easing supply chain headwinds and a strong consumer, earnings could come in above estimates in the 2024 fiscal year. Additionally, the company announced a 7% increase in its annual dividend, representing its 52nd consecutive annual increase.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
