The stock market has produced many winners over the past decade. Long-term investors benefit from companies that deliver consistent revenue and earnings growth over time.
While the stock market hasn’t always been kind to investors, it has always presented long-term opportunities. When some investors ran off from assets, others bought various dips of their favorite investments.
However, not every stock is guaranteed to go up or even reclaim its all-time high. Many tech stocks face a challenging path due to rising inflation, interest rate hikes and headwinds on consumers. Despite these obstacles, some game-changing tech stocks can still generate long-term wealth.
Investors looking to embrace a buy-and-hold strategy may benefit from these three tech stocks.
Fortinet (FTNT)
Fortinet (NASDAQ:FTNT) is a leading cybersecurity company that has delivered consistent revenue and earnings growth over several years. This consistency and the rising demand for cybersecurity solutions have helped the stock gain 268% over the past five years.
Fortinet shares stumbled at the start of August due to lower guidance. In a previous article about Fortinet, I mentioned that guidance only called for a 1% drop in revenue at the midpoints.
Fortinet’s revenue still jumped by 25.5% year-over-year, and GAAP operating income saw a 43% year-over-year gain. The corporation’s forward P/E ratio is now below 40 and presents a good buying opportunity for investors.
Cybersecurity is a $173.5 billion industry expected to achieve an 8.9% CAGR from now until 2027. Companies need to increase their online security to avoid costly cyber hacks. Fortinet has been an industry name for over a decade, and its stock can continue to reward long-term investors.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) was a top pick before the artificial intelligence (AI) boom drove up the prices of many semiconductor stocks. Broadcom has been a winner from the AI boom and is up by over 50% year-to-date.
While the artificial intelligence rush has sent many stocks to overvalued territory, Broadcom still has a forward P/E ratio under 20. The company has pristine revenue and earnings growth, which stand to strengthen from the approaching acquisition of VMware, a cloud computing and cybersecurity company. Broadcom only needs approval from China to seal the deal.
Broadcom shares have performed exceptionally well over the past five years. Shares have more than quadrupled during that time, and the dividend has also soared. Even with the rally, Broadcom still has a dividend yield above 2%.
Broadcom’s dividend has grown at an incredible pace since its first dividend 11 years ago. The first quarterly dividend was $0.21 per share in June 2013. Since then, the quarterly dividend per share has jumped to $4.60. That’s more than 20x growth over the past 11 years. Broadcom’s dividend growth this year was 12.2%. The dividend went from $4.10/share to $4.60/share during that time.
Perion Network (PERI)
Perion Network (NASDAQ:PERI) combines a low valuation with compelling growth opportunities in the advertising industry. The stock has a 12 forward P/E ratio and a 0.50 PEG ratio. Both of those ratios indicate the stock is undervalued.
Perion makes its money from search, social media and display advertising. Display advertising includes video ads, CTV ads and other advertising mediums. CTV ad revenue has been soaring and more than doubled year-over-year. Q2 revenue jumped by 22% year-over-year across the business.
Investors also had plenty to like about the company’s 10% year-over-year growth in GAAP net income. The growth rate isn’t as high compared to recent quarters, but the company still maintained a double-digit profit margin.
Perion is sitting on $185.9 million in cash and cash equivalents, making up more than 10% of the company’s market cap. Perion only has a $1.5 billion market cap at the time of writing. A small market cap, profitability, good revenue growth and many business opportunities make Perion stock a promising pick.
On this date of publication, Marc Guberti held long positions in FTNT, AVGO, and PERI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
