Spare $5,000? Consider Purchasing These 3 Potential High-Growth Stocks that Might Double Your Investment Amount.
Spare $5,000? Consider Purchasing These 3 Potential High-Growth Stocks that Might Double Your Investment Amount.
It's a normal desire to aim to grow your savings so you can better prepare for your retirement. The natural move will be to invest your money in growth investments that can enjoy consistent price growth. By doing so, you can grow your savings into something much bigger over time.
The secret to growing your wealth is to seek out businesses that can boost their revenue and profits consistently. In other words, these investments shouldn't be one-time winners that peak after a brief period. Instead, what you need to look for are businesses with a strong competitive edge that have a history of increasing their revenue and profits. They should also have catalysts that can help them to keep growing in the future.
If you have some extra cash, it's time to look into these three appealing growth investments that could help you to eventfully double your money.
Cummins
Cummins (CMI 1.93%) is a leader in power solutions that produces and sells a broad range of products, such as diesel engines, fuel systems, and turbochargers. The company has shown steady growth over the years, with sales soaring from $24 billion in 2021 to $34.1 billion in 2023. Net income (excluding exceptional items) increased from $2.1 billion to $2.7 billion over the same period. The business is also a consistent free-cash-flow generator, with free cash flow climbing from $1.5 billion in 2021 to $2.8 billion in 2023. Cummins also increased its quarterly dividend per share from $1.35 in 2021 to $1.68 by 2023.
The business continued to grow in the first nine months of this year, albeit at a slower pace. Revenue inched up 0.5% year over year to $25.7 billion while operating income crept up 1.5% year over year to $3 billion. Net income jumped 63% year over year to $3.5 billion due to a one-off gain on the disposal of Atmus, a filtration technology company. Excluding the $1.3 billion non-taxable gain, Cummins' net income would have risen by close to 3% year over year to $2.2 billion. The board further increased the company's quarterly dividend by around 8.3% to $1.82.
Cummins shared its growth plan during its recent Investor Day event and management is raising its targets for 2030. Its core business is expected to achieve $39 billion to $42 billion of revenue by 2030 while generating more than $35 billion of operating cash flow from 2022 to 2030. Accelera, its zero-emissions brand launched in March 2023, is projected to contribute around $3 billion to $9 billion in incremental revenue and should break even by 2027.
In total, Cummins expects revenue to hit $43 billion to $48 billion by 2030 with $34 billion to $36 billion of operating cash flow generated. Management has identified margin expansion drivers for each of its five business segments and set clear financial targets for steady, sustained growth. Sales should enjoy a 5% to 7% per annum growth with earnings per share growing at between 7% to 9% until 2030, driven by enduring themes such as continued OEM outsourcing, global data center investments, and growth in the aftermarket segment.
Paycom Software
Paycom Software (PAYC 1.22%) offers businesses a cloud solution for human resources and payroll processing. The company's platform offers the entire suite of services from onboarding to talent management, allowing its customers to streamline processes and increase efficiency. Paycom grew its revenue from $1.1 billion in 2021 to $1.7 billion in 2023, with more than 98% of its revenue being recurring in 2023. Net income increased from $196 million to $340.8 million over the same period. The business also generated copious and increasing amounts of free cash flow. Free cash flow went from $193.2 million in 2021 to $288.2 million in 2023. The cloud company also paid out a consistent quarterly dividend of $0.375 per share since May 2023.
Paycom reported a robust set of earnings for the first nine months of 2024. Revenue rose 10.3% year over year to $1.4 billion while operating income climbed 41% year over year to $485.8 million. Net income surged 50% year over year to $388.4 million. The company also continued to produce healthy free cash flow to the tune of $232 million, up 8% year over year.
During Paycom's recent earnings call, CEO Chad Richardson remarked that demand for automated solutions remains strong, acting as a tailwind for the business. The company has developed its artificial intelligence (AI) solutions internally to improve service response times by 25% and believes that there are other opportunities to monetize AI. Paycom is also active in four countries and recently onboarded a multinational manufacturing company, which implies that there is potential for international expansion. It still holds less than 5% of its total addressable market, indicating strong opportunities for potential growth in the coming years.
Walmart (WMT, up by 0.87%) operates a vast network of over 10,500 retail outlets across 19 countries, employing a workforce of approximately 2.1 million people globally, with a significant portion of 1.6 million based in the United States. The corporation has demonstrated consistent growth in its financial performance over recent years, indicating a robust business model and strong brand recognition. During this period, revenue swelled from $572.8 billion in fiscal 2022 (concluding on January 31st) to $648.1 billion in fiscal 2024. The net income also increased from $13.7 billion to $15.5 billion over the same duration.
Another impressive aspect of Walmart's performance is its strong generation of free cash flow, which climbed from $11.1 billion in fiscal 2022 to $15.1 billion in fiscal 2024. This surge in free cash flow supported the rise in the company's dividend, which ascended from $0.183 to $0.2075 (noteworthy, shares underwent a 3-for-1 split recently). This increase marks the 51st consecutive year that Walmart has boosted its dividend, with the recent 9% year-over-year increase being the most significant enhancement in over a decade.
During the initial nine months of fiscal 2025, this upswing persisted. Total revenue escalated by 5.4% year over year to $500.4 billion, while operating income expanded by 8.8% year over year to $21.5 billion. Net income leaped by 41% year over year to $14.2 billion, and the retail giant maintained a healthy free cash flow of $6.2 billion, a 43% year-over-year ascension. For the third quarter alone, Walmart registered a 27% surge in global e-commerce sales along with a 28% growth in its global advertising business.
Walmart appears well-prepared for further expansion. At the beginning of this year, the retailer announced plans to develop or renovate more than 150 stores and revamp existing ones. These improvements will embody Walmart's "Future Store" concept, featuring innovative store layouts, a broader product range, and technological advancements to facilitate staff and enhance customer experience.
Two months ago, Walmart rolled out expanded pet care services by intensifying its virtual veterinary care offerings and supplying pet grooming services and pet food and supplies. Just lately, Walmart completed its acquisition of Vizio, which is expected to assist advertisers in reaching its customers more effectively, thereby augmenting its advertising business. Following these initiatives, investors can anticipate continued growth from Walmart and further increases in its quarterly dividend.
Based on the provided text, here are two sentences that contain the words 'finance', 'money', 'investing':
- To finance your retirement plans, you might consider investing your money in growth investments that have a consistent track record of revenue and profit growth, such as Cummins or Paycom Software.
- One way to grow your finance portfolio is to invest in businesses with a strong competitive edge, like Cummins or Walmart, that have a history of increasing revenue and profits, generating free cash flow, and paying out consistent dividends.