Buying shares of growing companies is a popular formula for success. As these corporations report revenue and earnings growth, shareholders get rewarded with higher stock prices. Parking your money into these types of assets means less time in your portfolio.
Stock portfolios aren’t supposed to be exciting. Holding onto reliable growth stocks and diversifying your portfolio can minimize risk while increasing your potential upside. Some investors make monthly contributions to their portfolios and wait patiently for the returns to compound. How you use your monthly contributions will impact your portfolio’s performance and your progress toward retirement goals.
If you have $1,000 to spare and are shopping around for the best growth stocks, there are three worthy investments to consider.
The Trade Desk (TTD)
The Trade Desk (NASDAQ:TTD) is a global advertising company specializing in demand-side ads. Advertisers use The Trade Desk’s software to buy connected TV, video, and audio ad placements. The company has a network of over 350 partners, including ABC, Spotify, CBS, FOX, and the Discovery Channel.
The company’s latest earnings report revealed strong revenue growth. The Trade Desk achieved 21% year-over-year revenue growth and doubled its net income. The company maintained a retention rate above 95% in the first quarter, demonstrating the strong demand for the company’s software.
The Trade Desk provided Q2 revenue guidance of at least $452 million. This benchmark implies a 20% year-over-year growth rate from last year’s results. Despite shares jumping by over 75% year-to-date, The Trade Desk is still a bit away from its all-time high in November 2021. A high retention rate and rising demand for The Trade Desk’s demand-side platform can lead to more growth in the future.
Visa (V)
Visa (NYSE:V) is the top credit card company in the stock market with its revenue growth, earnings growth, and reasonable valuation compared to its peers. The company has reliable profit margins and growth that fueled the stock’s 77% rally over the past five years.
Visa highlighted double-digit revenue and earnings growth in the most recent earnings report. Growth in these areas helped the company maintain a profit margin above 50%, a feat the company also achieved over the two previous quarters.
The company used some of its profits to make a $1 billion acquisition of Pismo, a Brazilian fintech company. Pismo has grown at an extraordinary pace and will contribute to Visa’s earnings and revenue growth in future quarters.
Most investors don’t buy Visa for the dividend because the yield sits at 0.75%, but it is a worthy pick for dividend growth investors. Yes, the yield is low, but Visa has upped its dividend by 50% over the past three years. The annualized dividend per share jumped from $1.20 to $1.80 during that time. The company’s ability to support and rapidly grow the dividend gives long-term investors another reason to hold onto the stock.
ASML (ASML)
ASML (NASDAQ:ASML) helps chipmakers mass produce chips with its lithography technology. The hardware company also has several software programs that enable quicker chip production. ASML controls over 90% of the lithography market, making it hard for competitors to keep up.
The company has high revenue and earnings growth that have propelled the stock to over 270% in gains over the past five years. Shares are up 36% year-to-date, and the recent earnings report indicates more growth is on the way. The company expects net sales to grow by 25% in 2023 compared to 2022.
ASML also offers a dividend while investors wait for long-term returns. The yield sits at 1.36%, and ASML hiked the dividend by 5.5% in 2023.
Leadership believes ASML can reach annual sales of between 30 billion euros and 40 billion euros in 2025. The company reported 21.2 billion euros in sales in 2022 and believes its annual sales can jump by at least 25% in 2023. This jump would put the company at roughly 26.5 billion euros. The high end of the range, 40 billion euros, implies the company can grow revenue by an additional 50.9% from 2023 to 2025. This conclusion assumes that the company will achieve its revenue goal of roughly 26.5 billion euros in 2023.
On this date of publication, Marc Guberti held a long position in V. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
