Blue-chip stocks are an integral part of the portfolio. These holdings offer steady returns and regular cash flows in the form of dividends. Even if blue-chip stocks deliver annualized returns of 8% to 12%, it’s good to beat inflation and maintain the purchasing power of your money. However, for massive wealth creation in stock markets, it’s important to look at quality growth stocks to buy and hold.
This article focuses on growth stocks with the potential to deliver 10x or 20x returns by 2030. It takes a lot of patience and conviction to hold growth stocks for an extended period. However, the rewards can be immense. Of course, it’s important to review the business developments on a quarterly and annual basis.
After the big correction of 2022, growth stocks have witnessed stability and recovery. However, there are multiple growth stories worth considering at current levels. Let’s discuss three growth stocks to buy and hold for multibagger returns by 2030.
Miniso Group (MNSO)
Miniso Group (NYSE:MNSO) is among the best emerging retail sector growth stocks to buy and hold. Over a 12-month period, MNSO stock has skyrocketed by over 450%. I would look at corrections as a good entry point. It’s also important to note that the stock still trades at an attractive forward price-earnings ratio of 25.
The robust growth for Miniso, which has an international presence, indicates the company’s products are well accepted. As a retailer and wholesaler of lifestyle products, MNSO has a big addressable market. The continued launch of new SKUs and attractive pricing are the differentiating factors.
Miniso seems focused on shareholder value creation as the company’s growth accelerates. Recently, the company announced a $200 million share repurchase program. Prior to that, Miniso publicly stated a dividend policy “targeting an annual dividend no less than 50% of its annual adjusted net profit.”
In terms of growth, Miniso has opened 592 new stores in China and internationally in the last four quarters. Aggressive store opening will ensure that robust revenue growth sustains.
Li Auto (LI)
Among Chinese electric vehicle (EV) growth stocks, Li Auto (NASDAQ:LI) has emerged as the strongest. I would prefer to buy and hold LI stock over the likes of Nio (NYSE:NIO) and XPeng (NYSE:XPEV). Even after a rally of 87% year-to-date, the stock looks attractive for fresh exposure.
Li Auto commenced volume production in November 2019. Within four years, the company has delivered robust growth and aggressive retail expansion. The company has 331 retail stores in 127 cities. Further, the current model portfolio includes Li L9, Li L8, and Li L7.
Besides stellar deliveries and revenue growth, the following points are worth noting. First, Li reported a healthy vehicle margin of 21% for Q2 2023. Further, the company reported free cash flow (FCF) of $1.33 billion for the quarter.
In addition, Li reported cash and equivalents of $10.17 billion as of Q2. That provides high financial flexibility for aggressive investments toward product development and retail expansion. Potential international expansion will likely be the next step toward sustained delivery growth.
Amdocs (DOX)
It’s been a good year for technology stocks, with artificial intelligence being a key investment theme. There are several emerging tech stocks to buy and hold for long-term value creation. I believe that Amdocs (NASDAQ:DOX) is worth considering and is undervalued.
DOX stock trades at a forward price-earnings ratio of 14.5 and offers an attractive dividend yield of 2%. Considering the addressable market and cash flow potential, I expect the stock to deliver multibagger returns.
As an overview, Amdocs provides software and services solutions to the telecommunication and media industry. The company believes the addressable market for its services could be $57 billion by 2025. If that holds true, Amdocs has ample scope for growth and shareholder value creation.
I must add here that Amdocs expects FCF of $700 million for 2023. With sustained growth visibility, I foresee FCF in excess of $1 billion in the next 24 months. That would translate into higher dividends coupled with the flexibility to invest in organic and acquisition-driven growth.
On the date of publication, Faisal Humayun did not hold (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.
