Pounce on These 7 High-Growth Blue-Chip Stocks Now


  • Alphabet (GOOG, GOOGL): Many businesses use the company’s advertising channels to reach more customers.
  • Chipotle (CMG): Inflation and price hikes aren’t slowing down sales.
  • Walmart (WMT): More people are shopping at the retailer to save money on everyday items.
  • Continue reading to discover the rest of the high-growth blue-chip stocks.
high-growth blue-chip stocks - Pounce on These 7 High-Growth Blue-Chip Stocks Now

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You can find plenty of growth opportunities if you look for blue-chip stocks. While some stocks in this category are low-risk, low-reward companies, other corporations can generate attractive long-term returns.

Some investors like to find hidden opportunities, but you don’t have to look very far to find high-growth blue-chip stocks that can deliver. Corporations with high market caps often amass lofty price points due to impressive fundamentals. Some companies reach $1 billion with very little merit, while it’s more difficult to find sketchy $1 trillion corporations. In some cases, bigger is better.

Investors should prioritize companies that have noteworthy competitive advantages, rising revenue, and profit margin expansion. Those elements allow companies to outperform the market and can move you closer to your long-term financial goals. Investors should keep these high-growth blue-chip stocks on their radars.

Alphabet (GOOG, GOOGL)

Alphabet (GOOGL) - Quantum Computing Stocks to Buy

Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) offers an essential service for many businesses. Some companies rely on the company’s advertising campaigns to reach new customers and scale their revenue. Businesses also compete for the top results for various keywords.

Corporations, small businesses and solopreneurs spend billions of dollars every month hoping to get in front of more people. While businesses can choose from many advertising channels, few choices deliver the same reach and targeting as Alphabet.

While ad revenue is a key driver, Google Cloud is also gaining momentum. It represented more than 10% of Alphabet’s total revenue in Q1 2024. Overall revenue increased by 15% year-over-year in that quarter while net income surged by 57% year-over-year.

Alphabet has outperformed the stock market for many years. Its stock is up by 24% year-to-date and has gained 224% over the past five years. The stock currently trades at a 27 P/E ratio and has a 0.46% yield.

Chipotle (CMG)

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Consumers are willing to spend premiums on healthy food choices, much to the benefit of Chipotle (NYSE:CMG). The Mexican Grill chain has returned 36% to shareholders year-to-date and has logged a 329% gain over the past five years.

A recently announced 50-for-1 stock split catapulted Chipotle stock to all-time highs. However, shares were flat in May which has given long-term investors an opportunity to accumulate shares. 

Chipotle’s first quarter results highlight why the company still has plenty of long-term gains in its future. Revenue increased by 14.1% year-over-year to reach $2.7 billion while diluted EPS jumped by 23.9% year-over-year. Chipotle closed out the quarter with a 13.3% net profit margin and 47 additional restaurants. The company added a Chipotlane in 43 of its restaurants.

The fast food restaurant giant remains on pace to open 285-315 restaurants in 2024. This development will help Chipotle continue its expansion as it becomes a top choice for many consumers.

Walmart (WMT)

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Walmart (NYSE:WMT) is a more stable business than most high-growth blue-chip stocks. It’s the leading grocer, and the company also has a wide range of affordable products. Walmart’s business model has been working well for decades, and Q1 FY25 results demonstrated that the company is still robust. 

Revenue increased by 6.0% year-over-year while adjusted EPS jumped by 22.4% year-over-year. Shares have been on a run this year and are up by 23% year-to-date. Furthermore, Walmart stock has gained 85% over the past five years.

The stock currently trades at a 34 P/E ratio and offers a 1.27% yield. Walmart recently raised its dividend by 9% which was the highest increase in more than a decade. Walmart has been paying and raising its dividend for 51 consecutive years. 

Advertising and e-commerce revenue continue to lead the way. Both of these segments exhibited year-over-year growth rates above 20%. These components of Walmart’s business should result in higher profit margins and better results in the future.

American Express (AXP)

an American Express (AXP) credit card sticking out of someone's pocket
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American Express (NYSE:AXP) trades at a reasonable valuation compared to other credit and debit card issuers. The fintech firm makes a small percentage of each credit and debit card transaction. These transactions have become quite common due to these cards’ convenience, rewards, security, and other perks.

American Express offers enticing welcome bonuses to encourage people to open accounts with them instead of competitors. The strategy has been working, as more than 60% of new account openings in Q1 2024 came from Millennials and Gen Z consumers. 

Impressive financials accompanied the new account openings. American Express reported 11% year-over-year revenue growth and 34% year-over-year net income growth. Profit margins rose to 16.9% which is lower than many of its competitors. As American Express expands its margins, the company can become a compelling long-term pick.

The fintech stock has been playing its role for long-term investors. Shares are up by 24% year-to-date and have almost doubled over the past five years. The stock trades at a 19 P/E ratio and has a 1.20% yield.

Cintas (CTAS)

Image of the Cintas (CTAS) logo on the side of a white van.
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Cintas (NASDAQ:CTAS) provides business supplies and safety equipment for more than one million businesses. The company’s vast customer pool and years of experience make it a compelling blue-chip stock. It’s also got captivating returns that can entice any growth investor. The stock is up by 14% year-to-date and has almost tripled over the past five years. The stock trades at a 46.5 P/E ratio and offers a 0.80% yield. 

Cintas delivered solid financials in Q3 FY24. Revenue increased by 9.9% year-over-year to reach $2.41 billion. Net income was up by 22.0% year-over-year and came to $397.6 million. Cintas also increased its quarterly dividend by 17.1% year-over-year. The company has maintained an annualized dividend growth rate of 21.05% over the past decade.

The stock has plenty of supports within Wall Street. Cintas is rated as a Moderate Buy with a projected 8% gain from current levels. The highest price target of $790 suggests that Cintas stock can go up by an additional 17.2%.

Caterpillar (CAT)

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Caterpillar (NYSE:CAT) has been a leading construction equipment provider for almost 100 years. The company’s leaders have navigated through various economic booms and busts. Caterpillar has been around for a while, and its stock returns continue to impress investors. Shares are up by 12% year-to-date and have gained 164% over the past five years.

Caterpillar trades at a 15 P/E ratio and offers a 1.58% yield. The construction equipment firm has maintained an annualized dividend growth rate of 8.04% over the past decade. Caterpillar has raised its dividend for 31 consecutive years and has a low 23% dividend payout ratio. That low ratio should support dividend hikes for many years.

The company reported mixed earnings to start 2024. Revenue was flat year-over-year while net income jumped by 47.0% year-over-year. Higher profit margins will reduce the stock’s P/E ratio and result in a more enticing valuation for long-term investors.

Deckers Outdoor (DECK)

Old, scratched, used Black and Decker cordless screwdriver in a small woodworking shop
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Deckers Outdoor (NYSE:DECK) continues to gain market share from other athletic apparel giants. HOKA and UGG sales have helped the stock reach all-time highs. The stock is up by 60% year-to-date amid being added to the S&P 500 index. Shares are also up by 573% over the past five years.

While revenue growth has been normal, the company accelerated its growth rate to wrap up fiscal 2024. Q4 FY24 sales increased by 21.2% year-over-year to reach $959.8 million. Diluted earnings per share grew at an even faster rate, going from $3.46 to $4.95 per share. That’s a 43.1% year-over-year increase.

Higher profit margins and successes from the recent quarter have brought the stock’s P/E ratio up to 37. It’s a bit higher than it was a few weeks ago, but rapidly growing net income can compensate for the recent surge. HOKA was the company’s fastest growing segment and also made up more than half of the firm’s total revenue.

On this date of publication, Marc Guberti held long positions in GOOG and DECK. 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.

Article printed from InvestorPlace Media, https://investorplace.com/2024/06/pounce-on-these-7-high-growth-blue-chip-stocks-now/.

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