You don’t have to buy speculative stocks to triple your money in a few years.
In fact, it’s even easier to triple your money if you set a lengthy time horizon. A slow and steady approach can yield better results than a high-risk, high-reward portfolio.
Blue-chip stocks with immense potential tend to have a few things in common. These companies have rising revenue and profit margins. They also have tremendous long-term growth opportunities and strong demand for their offers. These three blue-chip stocks seem to fit the bill and have the potential to generate meaningful gains.
Texas Roadhouse (TXRH)
Steakhouse chain Texas Roadhouse (NASDAQ:TXRH) has 753 restaurants and uses a mix of its own restaurants and franchises. It has 644 company-owned restaurants and 109 franchise restaurants. Company-owned restaurants grew by 5.4% year-over-year (YOY) while the total number of franchise restaurants was up by 17.2% YOY.
Currently, the corporation has an $11.5 billion market cap and a 35 P/E ratio. That valuation is more reasonable than most restaurant chains that are growing at similar rates as Texas Roadhouse. Also, the stock has a 1.41% yield along with an annualized dividend growth rate of 16.05% over the past decade.
Texas Roadhouse reported 12.5% YOY revenue growth and 31.0% YOY net income growth in Q1 of 2024. More investors are loading up on restaurants with compelling growth prospects.
It’s a bit shocking that Texas Roadhouse hasn’t soared higher based on the current demand for these stocks. However, it’s to the benefit of investors who spot this under-the-radar pick. The hidden gem has held its own compared to most indices. Shares are up by 45% YTD and have gained 211% over the past five years.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) isn’t exactly a hidden gem. The tech giant is a trillion-dollar corporation that captures headlines as a member of the Magnificent Seven. However, this blue-chip stock still has the potential to triple its returns over the next decade.
Investors may feel as if a 35% year-to-date (YTD) gain and a 5-year gain of 170% make Meta Platforms due for a correction. However, the company’s financials support those returns. Net income more than doubled YOY in Q1 of 2024 as the social media giant aims to become more efficient. Revenue increased by 27% YOY, indicating that the company can trim its headcount while gaining market share.
Almost all of the company’s revenue comes from advertising. While Meta Platforms’ strides in artificial intelligence (AI) can lead to new income streams, investors have to treat it primarily as an ad company rather than a tech conglomerate.
Even though advertising is the company’s make-or-break source of revenue, it’s a compelling pick for patient investors. Meta Platforms does very well in that department, and users continue to flock to the company’s social networks. Family daily active users reached 3.24 billion which is a 7% YOY improvement.
Elf Beauty (ELF)
Beauty company Elf Beauty (NYSE:ELF) continues to exceed investors’ expectations while delivering impressive returns. The company is pricier than the others on this list with its 85 P/E ratio. Elf Beauty has the high valuation because investors have been rushing to buy shares. The stock is up by 34% YTD and has gained a superb 1,470% over the past five years.
Also, the cosmetics firm delivered its 21st consecutive quarter of net sales growth in Q4 of 2024. Revenue increased by 71% YOY in the quarter and resulted in the company’s first year of more than $1 billion in net sales. Also, the firm gained market share in the beauty industry for the fifth consecutive year.
While its guidance initially spooked investors, Elf Beauty issued low guidance last year and proceeded to comfortably beat its guidance each quarter. The company has a vast opportunity as it taps into international markets. Leadership believes that it is still in its early innings of capitalizing on that opportunity.
On this date of publication, Marc Guberti held long positions in TXRH and ELF. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
