Buying and holding stocks for the long term takes up less time and can produce solid returns. Instead of looking at technical indicators and studying the market every day, investors can focus on the fundamentals and find companies with firm foundations and attractive growth prospects.
Millionaire-maker growth stocks often exhibit top and bottom-line growth. They are in promising industries and have produced reliable returns in the past. While many of the top growth stocks to buy have periodically experienced sideways price movement or declines, they have rewarded long-term investors.
These three high-potential growth stocks have a lot going for them and can help you on the path to a 7-figure portfolio.
ServiceNow (NOW)
Cloud computing is a booming industry that is set to exceed $2.4 trillion in value in 2030. Businesses need cloud computing for their software, cybersecurity, and cost efficiency. Cloud computing has a lot of room to grow, and one of the million-maker growth stocks on this list is a leader in the industry.
ServiceNow (NYSE:NOW) has over 7,700 global enterprise customers using its cloud computing platform. Approximately 1,000 of those customers spend over $1 million per year to use ServiceNow’s platform.
The company’s large customer base helped them achieve 24% year-over-year revenue growth for the first quarter. ServiceNow exceeded estimates for top and bottom-line growth and proceeded to raise their full-year subscription revenues guidance.
ServiceNow is a profitable, high-growth business in an attractive industry. The only weakness of the company is its valuation. A 25% rally since the start of May has contributed to the stock holding a P/E north of 285. The forward P/E is more attractive and is a little above 60. The company’s position in cloud computing and the industry’s growth runway can lead to a more reasonable valuation in the future.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) hasn’t received as much love as other semiconductor stocks after Nvidia’s (NYSE:NVDA) blowout quarter. It’s easy to see why. Qualcomm didn’t report the best earnings to start the year, with revenue down by 17% year-over-year and net income down by 42% year-over-year.
However, the firm has developed AI chips that have been giving Nvidia’s chips a run for their money. The growing demand for AI chips gives Qualcomm a catalyst that has largely been ignored. Other peers have seen their stock prices and valuations soar in recent weeks, but Qualcomm’s slow start gives investors a bargain in the booming AI industry.
Qualcomm only carries a 12.85 P/E ratio, putting it much lower than most of its peers. It wasn’t too long ago when Qualcomm reported double-digit year-over-year revenue and earnings growth. Investors can enjoy a dividend yield above 2.50% while waiting for the stock to recover and catch up with the other AI winners. The company has a good history of raising the dividend and bumped it up from an annualized $3 dividend per share to an annualized $3.20 dividend per share. The dividend jump marks a 6.67% year-over-year increase.
InMode (INMD)
InMode (NASDAQ:INMD) produces aesthetic medical devices with attractive profit margins and growth prospects. The Israeli company posted 23% year-over-year revenue growth and 30% year-over-year earnings growth in its most recent earnings report. Those numbers work out to a 38% profit margin, something that has been normal for the company.
InMode is up over 400% within the past five years despite a pullback from its all-time high of $97.86 on November 2, 2021. The company’s consistent, strong performance with revenue and profits combined with a reasonable valuation suggests the company can eclipse its all-time high within a few years.
Despite attractive profit margins and growth on all fronts, the company has a P/E ratio under 20. The company doesn’t show any signs of slowing down and only has a $3 billion market cap. It doesn’t even have any debt and reported a $574.5 million cash position in the first quarter. If Inmate continues to gain market share and receive a higher valuation, the stock price can accelerate over the next few years.
On the date of this publication, Marc Guberti held LONG positions in QCOM and INMD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
