You don’t have to stay on top of the stock market every day to grow your money. Instead, if you just focus on some of the top growth stocks, you can just let your money do all the work for you.
Even better, many of these very growth stocks have delivered long-term rewards for shareholders with ease. In fact, here are just a few of the top growth stocks you can buy, hold, and not have to check on very often.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA), which just became a $2 trillion company, is being fueled by strong financial results and artificial intelligence. Shares have more than tripled over the past year and are up by almost 2,000% over the past five years.
While most stocks that gain as much as Nvidia end up crashing, the stock’s gains are backed by solid earnings. For instance, Nvidia announced a 769% year-over-year growth in net income in Q4 FY24. That growth rate outpaced the company’s stock gains over the past year. The company also reported 265% year-over-year revenue growth which gives profits more room to expand.
Nvidia still has a few more quarters left of triple-digit year-over-year revenue growth. By the time revenue ‘slows’ into the high double-digits, Nvidia will have comfortably grown into its valuation. The company’s 33 forward price-to-earnings (P/E) ratio and 1.27 price-to-earnings-growth (PEG) ratio highlight how the valuation has improved.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) shares recently dipped after an analyst argued that the company is losing its competitive advantage in artificial intelligence. However, that assertion presents a long-term buying opportunity. Alphabet’s revenue has been growing over the past few quarters, with net income growth on the run. The sudden profitability of Google Cloud indicates profit margins can rise rapidly.
Alphabet closed out Q4 2023 with 13% year-over-year revenue growth and 52% year-over-year net income growth. The growth rate in the previous year was only 1% year-over-year due to challenges in the advertising market.
Alphabet is well into its advertising rebound, and rising cloud margins will improve overall profit margins. The stock only trades at a 25 P/E ratio and practically has a monopoly over the search engine market. Alphabet is the most undervalued Magnificent Seven stock and is up by 143% over the past five years.
Visa (V)
Another one of the top growth stocks to own, Visa (NYSE:V) offers high net profit margins, steady growth, and an attractive long-term dividend. While the stock only yields 0.75%, the corporation has more than doubled its dividend over the past five years. The company closed out 2023 by hiking its dividend by 15.6% year-over-year.
Shares have surged by 29% over the past year and are up by 90% over the past five years. The stock currently trades at a 33 P/E ratio. Visa expanded its net profit margins in the first quarter of fiscal 2024. Revenue increased by 9% year-over-year while net income was up by 17% year-over-year. The strength of the global consumer helped the company achieve solid financials, and Visa’s leadership expressed optimism that the trend could continue.
The fintech company is heading toward a $1 trillion valuation and is likely to reach that milestone within a few years. While that’s not going to happen this year, analysts do believe the stock has a 7% upside from its current price. The stock has 23 out of 24 ratings as “Buys” with one “Hold.” Overall, the stock is rated as a “Strong Buy.”
Elf Beauty (ELF)
Elf Beauty (NYSE:ELF) has been on a tear and has a solid foundation to extend its rally. The growth stock’s shares are up by 43% year-to-date, 170% over the past year, and 2,400% over the past five years.
The cosmetics firm offers products that have been a big hit for Gen Z. The strong demand for its products has resulted in 20 consecutive quarters of higher net sales. Revenue jumped by 85% year-over-year in the third quarter of fiscal 2024 while net income increased by 41% year-over-year. The company also gained 305 basis points of market share in the cosmetics industry.
Elf Beauty once again raised its guidance for fiscal 2024. Net sales are projected to reach $985 million at the midpoint compared to a midpoint of $901 million in the previous guidance. These developments suggest growth will continue for quite a while which can reward long-term investors. Strength in retail and e-commerce channels has driven the company’s strong financials.
Monster Beverage (MNST)
Monster Beverage (NASDAQ:MNST) produces energy drinks that have become big hits worldwide. Shares are up by 72% over the past five years and rising revenue and earnings suggest more upside.
Revenue jumped by 14.3% year-over-year in Q3 2023 while net income was up by 40.4% year-over-year. The company has healthy profit margins above 20% and a market cap approaching $60 billion.
Monster Beverage has been a sneaky good stock. Most investors would think of big tech companies first, but this stock has surprisingly been the best pick over the past 30 years. Monster Beverage isn’t likely to pull a repeat, but the company has a solid business model that produces high profits.
Analysts are quite bullish and are projecting a 14.50% upside from the current price. The stock is rated as a “Strong Buy” and has 11 “Buy” ratings out of 14. The other three ratings were “Holds.” The highest price target of $69/share suggests a 23.8% upside from the current price.
Chipotle (CMG)
We all need food, but people are getting more conscious about consuming healthy foods. That’s especially been a trend for Gen Z who has been more health-conscious than previous generations. Firms that combine healthy choices with convenience have been gaining market share, including this top pick.
Chipotle (NYSE:CMG) is a healthier alternative to many fast food restaurants. The firm’s popularity has skyrocketed across multiple generations, and the corporation now has a market cap above $70 billion.
The stock has a lot of momentum on its side with a 78% gain over the past year. The fast-food restaurant chain has also increased by 335% over the past five years. The company’s Q4 2023 results suggest the rally still has plenty of steam.
Chipotle reported 15.4% year-over-year revenue growth and opened 121 additional restaurants in the quarter. The company opened 271 restaurants throughout 2023 and has plans to open 285-315 new restaurants in 2024. Net income increased by 26.1% year-over-year. The company’s net profit margins have been in the low-double-digits for the past few quarters.
Watsco (WSO)
Watsco (NYSE:WSO) is an HVAC company that has silently outperformed the stock market. Shares are up by 26% over the past year and have gained 166% over the past five years. Stable revenue and earnings growth have helped the company inch higher and higher, although last quarter was an exception with declining year-over-year net income.
Unlike most of the growth stocks on this list, Watsco offers a dividend. While Visa offers a dividend and Nvidia offers a dividend yield that resembles a participation trophy, Watsco actually has a good yield which sits at 2.55%. The corporation recently hiked its annual dividend by 10% to reach $10.80 per share. That’s how much you’ll earn each year just by holding onto a share, and that doesn’t include reinvestments and dividend hikes.
Watsco has paid dividends to shareholders for 50 consecutive years. It’s got the dynamics of a blue chip and a growth stock wrapped into one.
On this date of publication, Marc Guberti held long positions in NVDA, GOOG, and ELF. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
