$1,000 Goes a Long Way: 3 Stocks That Could Deliver Hefty Returns


  • It used to take money to make money on Wall Street but you can own your future with just a $1,000 investment in these high-potential stocks to buy.
  • Domino’s (DPZ): The pizza chain has become an under-the-radar dividend stock generating phenomenal returns for investors.
  • Lowe’s (LOW): The home improvement center is weighed down by high interest rates and inflation but still has significant long-term potential.
  • Palo Alto Networks (PANW): The cloud-based cybersecurity expert saw businesses stretching out payments but that only means there is a lag in fulfillment.
High-Potential Stocks to Buy - $1,000 Goes a Long Way: 3 Stocks That Could Deliver Hefty Returns

Source: Shutterstock

Although it no longer takes money to make money on Wall Street, the more you have, the faster you can get to where you’re going. 

You can buy stocks with as little as $20 these days and not worry about getting skinned from transaction fees. But if you save up a little more cash you can buy more high-potential stocks, accelerating your ability to generate hefty returns from your investments. 

With $1,000 to buy into a company, you can jump-start the journey of setting yourself up for a comfortable retirement. Below are three high-potential stocks to buy today, particularly if you have a cool grand available that you don’t need for bills or emergencies. These are stellar companies with a fantastic track record and a long road of growth to look forward to.

Domino’s (DPZ)

A tall Domino's Pizza (DPZ) sign stands in Eau Claire, Wisconsin.
Source: Ken Wolter / Shutterstock.com

Pizza shop Domino’s (NYSE:DPZ) is the first company to buy with $1,000 to your name. Although it used to be known primarily for getting your cardboard-tasting pie delivered to you fast, a commitment to quality and getting it right rather than quick made it the premier pizza stock. What is still not realized by many is just how tasty Domino’s dividend is. It might just be better than its stuffed cheesy bread. 

Domino’s has raised its dividend for 12 consecutive years. It has also increased the payout at a mind-bending 20% compounded annual growth rate (CAGR) over that time frame. That’s nearly unheard of from dividend stalwarts let alone a pizza chain. Yet having found the secret of growth, Domino’s shares its wealth with investors.

By now the pizzeria is well-known for its “fortressing” strategy of flooding a market with stores to create a critical mass of mindshare amongst consumers. Each store might not make as much, but Domino’s sales overall increase. Revenue jumped 7.3% in the first quarter compared to a 5.9% increase a year ago. The stock has responded as well.

DPZ shares are up 25% this year and are 65% higher over the last 12 months. For the past decade Domino’s delivered a total return of 705%, nearly three times greater than the 241% return of the S&P 500. The power of capital appreciation and a rising dividend make Domino’s an excellent high-potential stock to buy for the next decade of growth.

Lowe’s (LOW)

the front of a Lowe's store
Source: Helen89 / Shutterstock.com

Home improvement expert Lowe’s (NYSE:LOW) is another dividend powerhouse. It has increased its payout for over 50 years, making it a dividend king. Yet equally impressive is that in just the past five years it has doubled the dividend for investors. The payment went from from $2.06 per share in 2018 to $4.40 last year, a better than 16% CAGR.

Lowe’s just reported first-quarter earnings that beat analyst expectations on the top and bottom line, even though results were down year-over-year. The Federal Reserve’s high-interest rate policies, coupled with elevated government-induced inflation rates, are pressuring retailers everywhere. Consumers are cutting back on big purchases as they must spend more on necessities.

Sales fell 4% in the quarter to $21.4 billion on a similar decline in comparable sales. Its professional business, however, saw positive comps for the period as it pushed harder to bring in more contractors. Compared to Home Depot (NYSE:HD), though, Lowe’s has a higher concentration of do-it-yourself customers.

Still, the DIY center reiterated it sees full-year sales guidance of $84 billion to $85 billion, in line with analyst estimates of $84.4 billion. Profits are forecast at $12.15 per share at the midpoint of its range, below Wall Street’s $12.19 per share.

Lowe’s has weathered such storms before and with the stock trading at 16 times earnings estimates and 20x free cash flow, it’s a high-potential stock to buy now.

Palo Alto Networks (PANW)

Palo Alto Networks (PANW) logo on corporate building
Source: Sundry Photography / Shutterstock.com

Cybersecurity expert Palo Alto Networks (NASDAQ:PANW) also just reported earnings that are showing the ill effects of government and Fed policies. Although fiscal fourth-quarter results were mostly inline with expectations, bookings showed customers were stretching out their payments to cope with rising costs instead of paying upfront.

Palo Alto Networks is consolidating its business under a single security platform intended to drive growth amongst enterprise-class customers. However, its results didn’t suggest there was much meaningful movement in that direction as macroeconomic concerns impact their performance as well. The cybersecurity stock, though, deemed the response “enthusiastic” and sees significant growth coming down the road.

New products designed for its AI-powered Cortex platform has potential to deliver greater performance. It also just signed a partnership with IBM (NYSE:IBM) to deliver new AI enhanced security offerings. IBM will prefer Palo Alto as its cybersecurity partner across its network, cloud and security operations center (SOC). 

Because these macro concerns will be relatively transitory, its results merely indicate a lag, not an abandonment of profitable growth and Palo Alto Networks is still a high-potential stock to buy.

On the date of publication, Rich Duprey held a LONG position in LOW stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/1000-goes-a-long-way-3-stocks-that-could-deliver-hefty-returns/.

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