3 Growth Stock Champions for Long-Term Gains
Growth stocks continue to lead the market higher and reward shareholders with solid returns on their investment. While the Magnificent Seven stocks continue to get most of the credit for the market’s ongoing rally, there are many stocks that get less attention that are also posting strong growth and helping to inflate their shareholders’ portfolios. Several lesser known companies are managing to grow by dominating their respective market. Others are growing through acquisitions, while others are benefitting from a strong economy and robust consumer spending. Whatever the reasons, there are plenty of growth stocks available for investors to choose from that can help give their portfolio a boost. Consider these names when trying to decide where to allocate capital next. Here are three growth stock champions for long-term gains.
Intuit (INTU)
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Intuit (NASDAQ:INTU), the business software company behind popular products such as TurboTax, Credit Karma and QuickBooks, continues to report strong financial results and remains a solid growth stock for the long-term. Year-to-date, INTU stock is up 10%, bringing its 12-month increase to 60% five-year gain to 164%. The company continues to see strong growth among small businesses and self-employed people, and gets a nice boost during tax season. The stock also pays a dividend of 90 cents a share per quarter, giving it a yield of 0.55%; not huge but beneficial.
Recently, Intuit reported better-than-expected financial results for what was its fiscal second quarter. The company announced earnings per share (EPS) of $2.63, which topped Wall Street forecasts of $2.30. Revenue in the quarter totaled $3.40 billion, up 11% from a year prior and in line with analyst estimates. Sales in the company’s small business and self-employed segment totaled $2.20 billion, up 18% from a year ago. In terms of guidance, Intuit forecasts an 11% revenue increase in the current quarter, which includes tax season, when the company generates about 40% of its annual sales.
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Capital One Financial (COF)
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Capital One Financial (NYSE:COF) is worth a look as it moves to grow its credit card offerings with the purchase of rival Discover Financial Services (NYSE:DFS). The company has offered $35.30 billion for Discover in an all-stock deal that’s expected to vault the company to the top ranks of credit card issuers in the U.S. Discover shareholders will receive 1.0192 Capital One shares for each Discover share they own, representing a 26% premium from Discover’s closing stock price of $110.49 a share on Feb. 16.
The companies said they expect the deal to close by early 2025. The merger of the two companies, which are among the largest credit card issuers in America, will further expand Capital One’s credit card offerings as well as its deposit base. Media reports say that Capital One plans to keep the Discover brand after the deal is finalized. The acquisition comes as Discover Financial transitions to a new leader under recently installed CEO Michael Rhodes. COF stock was enjoying a good run before the Discover deal was announced, with its share price up 24% over the last year and up 60% through five years.
Toll Brothers (TOL)
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With mortgage rates falling from a peak of more than 8%, there are signs that the U.S. housing market is starting to strengthen and that home buyers are returning. That would be further good news for Toll Brothers (NYSE:TOL), the luxury home builder that has continued to grow at a brisk pace despite challenges to the market in recent years. In the last 12 months, TOL stock has risen 88%, lifting its five-year increase to 214%. The company’s share price received a boost recently following yet another strong earnings report.
Toll Brothers reported EPS of $2.25 on revenue of $1.95 billion. Those results easily beat Wall Street estimates of $1.78 a share and $1.90 billion in revenue. The company delivered 1,927 homes for what was its fiscal first quarter and reported 2,042 signed contracts for future builds. Both those numbers also beat consensus forecasts. Citing a strong start to the year, Toll Brothers raised its 2024 guidance, now expecting to deliver 10,000 to 10,500 homes, up from the previous estimate of 9,850 to 10,350 units. The company’s results are viewed as a positive sign for the U.S. housing market.
On the date of publication, Joel Baglole 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.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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