The Top 3 S&P 500 Stocks to Buy in April 2024

  • These top S&P 500 stocks can deliver impressive long-term returns.
  • Marriott International (MAR): The hotel chain offers growth at a reasonable price as people continue to travel.
  • Caterpillar (CAT): The construction equipment giant has been in business for almost 100 years and recorded a 161% gain over the past five years.
  • Chipotle (CMG): Six price hikes in three years hasn’t stopped customers from flocking to the company’s restaurants.
top s&p 500 stocks - The Top 3 S&P 500 Stocks to Buy in April 2024

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The S&P 500 has been a solid index for long-term investors. Some years are better than others, but the index has generally moved upward in the long run. The index’s 5-year, 10-year, 20-year and 40-year returns all paint a picture of progress. Looking deeper into the popular index can reveal opportunities to outperform the stock market. While investors can look at the Magnificent Seven stocks for opportunities to outperform the index, you have probably heard of those stocks for a while. Variety is the spice of life, and these are some of the top S&P 500 stocks that aren’t members of the Magnificent Seven.

Marriott International (MAR)

Marriott logo in Milan, Italy. MAR stock.
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Marriott International (NASDAQ:MAR) has slightly outperformed the S&P 500 with a 75% gain over the past five years. The hotel chain is also off to a great start, with an 8% year-to-date gain.

Marriott offers growth at a reasonable price. The company trades at a 23 P/E ratio while paying a quarterly dividend. The stock has a 0.87% yield and hiked its dividend by 30% in 2023.

The hotel chain reported 12% year-over-year revenue growth and 26% year-over-year net income growth in Q4 2023. The firm’s profit margin exceeded 50%. Marriott is currently rated as a “Moderate Buy” with a projected 5% upside. The highest price target of $280/share suggests the stock can rally 17% from current levels.

Marriott initiated a $3.9 billion stock buyback in 2023. The company repurchased 21.5 million shares during that buyback. The company returned $4.5 billion to shareholders, including dividends.

Caterpillar (CAT)

Image of a yellow construction vehicle with the Caterpillar (CAT) logo on it
Source: astudio / Shutterstock.com

Caterpillar (NYSE:CAT) has outperformed the stock market with a 161% gain over the past five years. The company trades at an 18 P/E ratio while offering a 1.50% dividend yield. The annualized dividend growth rate is 8.20% over the past decade. 

The company offers an essential service. Construction equipment is required for many projects. While higher interest rates can slow construction, it’s a constant need for many businesses, states and countries. Caterpillar has been around for almost 100 years and has withstood various economic cycles like the Great Depression and the 1973 Oil Crisis. 

Caterpillar recently released another solid quarter of earnings. The firm’s Q4 2023 results indicated 3% year-over-year revenue growth and 84% year-over-year net income growth. Caterpillar set records for full-year sales, adjusted profits per share and ME&T free cash flow. The company returned $7.5 billion to shareholders via stock buybacks and dividends throughout 2023.

Chipotle (CMG)

Chipotle - Sign on building, CMG stock
Source: Retail Photographer / Shutterstock.com

Chipotle (NYSE:CMG) is up by 330% over the past five years and is gaining renewed attention thanks to an upcoming stock split. Investors will receive 50 shares for every share of Chipotle that they currently own. 

The historic 50-for-1 stock split will make shares more accessible to investors and increase options trading activity. While investors can buy fractional shares right now, they may feel more eager to buy shares if they can have entire shares of a company rather than a fractional one.

Chipotle has a lot going for it beyond the stock split. Revenue increased by 15.4% year-over-year in Q4 2023. The company has regularly achieved double-digit revenue growth, and profit margins have also been improving. The restaurant chain increased its diluted earnings per share by 27.3% year-over-year. 

While the restaurant firm is growing, another key advantage is the company’s pricing power. Chipotle has maintained a steady stream of loyal customers despite raising its prices six times over the past three years. Few companies can attract more customers while raising prices once a year, let alone six. Chipotle looks ready to deliver enticing long-term returns for patient investors. 

On the date of publication, Marc Guberti did not have (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.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.


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