Growth stocks are a critical part of your portfolio. These are the companies that have outpaced the rest, delivering big returns to investors.
While past growth is a good sign, it’s in the past. You want to make sure the high growth stocks in your portfolio are positioned to continue delivering big gains. With that in mind, I’ve selected seven great growth stocks.
Each offers that ideal combination of past performance and a high likelihood for big gains going forward.
- Abbot Laboratories (NYSE:ABT)
- Apple (NASDAQ:AAPL)
- Broadcom (NASDAQ:AVGO)
- Nvidia (NASDAQ:NVDA)
- Paypal (NASDAQ:PYPL)
- Qualcomm (NASDAQ:QCOM)
- United Parcel Service (NYSE:UPS)
The list is a little heavy on the tech side. That’s only natural, because the technology sector has spawned so many high growth stocks. However, there’s a little something here for everyone.
Growth Stocks: Abbot Laboratories (ABT)
Abbot Laboratories produces a wide range of high-tech medical devices. Products like diagnostic equipment, remote heart monitors, chronic pain treatment and diabetes management systems — including a glucose monitoring technology that eliminates the need for pinpricks. The company also produces a range of popular health nutrition products including Pedialyte, Similac and Ensure.
Over the past five years, ABT stock has delivered a return of 216%. That’s nothing to sneeze at. That’s especially true given our aging population, rising diabetes and heart disease rates. As well as the recent push to cut down on subscribing opioids for chronic pain management. All of these factors will add to ongoing growth potential for ABT stock.
As if that weren’t enough, the company just launched three different novel coronavirus testing solutions. The future looks bright for a company like Abbot Laboratories that is focused on diagnosing and managing these conditions.
ABT stock earns a Total Grade of ‘B’ in Portfolio Grader.
Apple is the most valuable publicly traded company in U.S. history. Its market cap is now $2.17 trillion, less than 3 years after it hit the $1 trillion milestone. That is the very definition of spectacular growth.
2021 has been considerably less impressive. After a bit of a roller coaster ride, AAPL stock is about where it started the year (hint: that makes it very tempting). However, look at what the company did in its latest quarter. Revenue of $89.6 billion, up 54% year over year. A commitment to increasing its share buyback program by $90 billion. And the company is far from sitting still. From 5G iPhones to the new M1 processors powering its MacBook, iMacs and the latest iPad Pros, Apple keeps moving forward.
Apple also has category-leading products in its lineup that dominate the competition, but are early in their lifecycle. They have years of growth ahead. Think AirPods and Apple Watch. Then there are the new products we know the company is working on for future release, including AR glasses and Project Titan — Apple’s long-awaited entrant to the EV market.
Oh, and on top of the physical products are the services. Apple Pay, AppleTV+, the App Store and others generated $16.9 billion in revenue last quarter, up 27% YoY. I think it’s fair to expect AAPL stock will continue to be a growth stock for the foreseeable future.
Apple stock currently holds a ‘B’ rating in Portfolio Grader.
I like Broadcom because the company does so much in the technology space, but often flies under the radar. The company sells a wide range of semiconductors and hardware that cover many applications: storage, networking, wireless and optical among them.
Broadcom chips and patented technology are found in a huge range of consumer and enterprise gear ranging from Bluetooth chips in smartphones and smart audio devices, to fiber optic networking switches.
In addition, Broadcom has a large range of mainframe software applications, along with enterprise software solutions. Broadcom also owns the popular Symantec cyber security brand. And cyber security is becoming more important than ever. AVGO stock has posted growth of 223% over the past 5 years, but the rate has accelerated over the past year.
At this point, AVGO stock carries a ‘B’ rating in Portfolio Grader.
Nvidia investors have seen their shares appreciate in value by an incredible 1,356% over the past five years. This is a poster child for growth stocks. However, the ride wasn’t entirely smooth.
In 2018, NVDA stock dropped after a cryptocurrency crash left the company with a glut of unsold graphics cards. This time around, Nvidia has released a GPU specifically for those crypto miners. That way the company can take advantage of the demand for its graphics cards for crypto mining, without impacting availability for the general public.
The demand is huge for these new RTX 3000 series cards. PC gamers are standing in line for them. That demand isn’t going away any time soon. And with the growth in popularity of PC gaming, Nvidia is going to be selling new graphics cards far into the future.
Then there’s the demand for GPUs (which use parallel processing) for high-tech applications like AI, machine learning and autonomous driving. All of these areas are in growth mode and that will only accelerate — keeping up the high demand for Nvidia chips as they do so.
NVDA stock’s Total Grade in Portfolio Grader is a ‘B.’
PayPal was in the perfect position at the start of the pandemic. The world’s most popular online payment option, a contact-free payment solution and its Venmo cash app were in hot demand when online shopping spiked in popularity, while cash was avoided.
PYPL was already firmly in growth stock territory. However, with the pandemic driving usage and big subscriber growth, the company reported 2020 was the strongest performance in its history. Transaction volume over the PayPal network was up 31%, revenue was up 21% and PayPal added 72.7 million new active accounts.
It’s little wonder that PYPL stock closed 2020 with a 77% gain.
Look for those millions of additional users to keep revenue growth going strong. In addition, PayPal is now allowing its users to trade cryptocurrency and to pay for purchases at millions of online merchants using their crypto holdings. That’s not just good news for cryptocurrencies — which always faced challenges when it came to spending them — it’s also expected to add more fuel to the PYPL stock growth story.
PayPal shares currently have a Total Grade of ‘B’ in Portfolio Grader.
After several rough years (more on that shortly), the past two have been very good for Qualcomm. As a result, QCOM stock is up 169% over the past 5 years — with most of that growth coming over the past 2 years.
The reason for the tough years was a protracted legal battle between Apple and Qualcomm. The fight over royalty payments was expensive and cost Qualcomm one of its biggest clients. That is, until April, 2019 when the two companies reached a surprise settlement. Apple agreed to pay Qualcomm the royalties it had been withholding, while also signing up to use Qualcomm 5G modems in the iPhone for the next 6 years. News of that settlement sent QCOM stock to a 23% single-day gain.
Thanks to its patent portfolio, Qualcomm collects a royalty off every smartphone sold, regardless of who makes the modem. Qualcomm’s business isn’t all modems, of course. Its Snapdragon CPUs power the majority of Android smartphones and you’ll find QCOM chips in popular products like wireless earbuds.
The company’s future looks good. The Wall Street Journal is tracking 29 investment analysts who offer QCOM coverage. They have this growth stock rated as a consensus “Overweight” with an average $172.70 price target, which would offer 12-month upside of 25%.
QCOM stock is rated ‘B’ in Portfolio Grader.
Finally, another company that has seen its growth picture dramatically changed by the pandemic. For most of the past 5 years, UPS stock has been flat. No-one would have considered it a growth stock.
Then the pandemic hit and suddenly everyone was shopping online. All those packages needed to be delivered. Much of that volume went to UPS. The company reported its highest revenue ever in 2020, along with the highest adjusted earnings per share in company history. That powered UPS stock to 85% growth in 2020.
The future looks bright for this shipping company, even as vaccines promise to re-open countries. Now that they have a taste for the convenience of online shopping, it’s expected that consumers will continue to do so at a much higher levels than pre-pandemic. That spells a continuation of the business boost for UPS, and continued growth for UPS stock.
One of the few companies on this list of growth stocks to not be involved in technology, UPS stock is also the lone Portfolio Grader ‘A’ rating holder.
— Louis Navellier and the InvestorPlace Research StaffAmerica's #1 Stock Picker: BUY "AMZN of Houses" [sponsor]
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Source: Investor Place