4 US Stocks That Are Perfect for a Growth Investor’s Portfolio
Growth investing is an effective method to increase your wealth over time.
By parking your money in attractive growth stocks that can grow their profits and cash flows, you can see your portfolio’s value increase steadily.
These stocks need to demonstrate a great track record of growing their profits over time and possess catalysts that can take their business to the next level.
By owning such stocks over the long term and enjoying steady capital gains, you can better assure yourself of a comfortable retirement.
Here are four US growth stocks that should sit well within a growth investor’s portfolio.
Rollins (NYSE: ROL)
Rollins provides pest control services and protection against termite damage, rodents, and insects.
The company serves more than 2.8 million customers across the US, Latin America, Europe, Asia, Africa, and Australia.
Rollins has demonstrated consistent growth over the years as it slowly expands its capabilities and presence through choice acquisitions.
Revenue increased from US$2.4 billion in 2021 to US$3.1 billion by 2023.
Net profit also followed the same trajectory, going from US$356.6 million to US$435 million over the same period.
The pest control specialist also generated consistent and growing positive free cash flow.
Free cash flow started at US$374.6 million in 2021 and increased to US$496.9 million by 2023.
The company’s momentum has continued into the first quarter of 2024 (1Q 2024).
Revenue jumped 13.7% year on year to US$748.3 million while net profit improved by 7% year on year to US$94.4 million.
Rollins continued to generate solid free cash flow for the quarter and also increased its quarterly dividend from US$0.13 to US$0.15, up 15% year on year.
The company acquired Fox Pest Control back in April 2023 to accelerate its growth strategy of expanding into new regions within the US.
Management sees the business existing in a large and fragmented industry, giving Rollins lots more opportunities to acquire for growth.
Shopify (NYSE: SHOP)
Shopify is an e-commerce outfit that provides a platform and tools for business owners and entrepreneurs to run a business of any size.
The company saw healthy top-line growth in 2023 with a 26.1% year-on-year increase in revenue to US$7.1 billion.
Shopify generated a small net profit of US$132 million last year, reversing from a net loss of US$3.5 billion in 2022.
The business also generated a positive free cash flow of around US$900 million in 2023.
For 1Q 2024, Shopify continued its positive momentum.
Gross merchandise value (GMV) increased 23% year on year to US$60.9 billion, which helped revenue to climb 23% year on year to US$1.9 billion.
Gross payments volume across the e-commerce player’s system surged by 31.6% year on year to US$36.2 billion.
Free cash flow for the quarter was even stronger at US$232 million, nearly triple the US$86 million churned out a year ago.
Management believes that there is a total addressable market of US$849 billion that it can tap into comprising offline and business-to-business commerce, merchant services, and small and medium enterprise e-commerce.
Fiserv (NYSE: FI)
Fiserv is a leader in payments and financial technology and provides services such as e-commerce, account processing, digital banking solutions, and a cloud-based point-of-sale platform.
Like Rollins, the company posted steady growth in its top and bottom lines over the years.
Revenue for Fiserv increased from US$16.2 billion in 2021 to US$19.1 billion in 2023.
Net profit went from US$1.3 billion to US$3.1 billion over the same period.
Operating and free cash flow have also been growing in tandem.
Free cash flow increased from US$2.9 billion to US$3.8 billion from 2021 to 2023.
For 1Q 2024, Fiserv reported a 7.4% year-on-year increase in revenue to US$4.9 billion with net profit leaping 30.6% year on year to US$735 million.
The business reported two CashFlow Central wins with large banks, making it a total of four banks since the service launched in November last year.
CashFlow Central is a banking-centric payments platform that helps small businesses save time and resources and obtain actionable insights.
The company has adjusted its 2024 outlook upwards and expects 15% to 17% year-on-year revenue growth and earnings per share growth of between 14% to 16%.
Blackline (NASDAQ: BL)
Blackline operates a cloud platform that helps to modernise its clients’ accounting systems to manage and automate financial close, intercompany accounting, and the consolidation process.
Blackline has been growing steadily over the years, with revenue rising from US$425.7 million in 2021 to US$590 million in 2023.
The business was generating losses for 2021 and 2022 but broke even in 2023 with a net profit of US$52.8 million.
Despite the losses in 2021 and 2022, Blackline has generated consistent positive free cash flow over all three years.
The 1Q 2024 saw continued growth with revenue rising 13.3% year on year to US$157.5 million.
The company turned in a net profit of US$10.8 million, a sharp reversal from the net loss of US$12 million in the prior year.
The number of customers has grown from 3,433 in 2020 to 4,398 in 2023 for a compound annual growth rate of 9%.
Blackline is the market leader in accounting software and management believes the business has a large and unpenetrated total addressable market of US$39 billion comprising more than 200,000 target customers.
This market size should provide Blackline with ample opportunities for further growth through its “land and expand” model.
Which SGX companies will reach S$100 billion next? Our latest FREE report provides detailed financial analysis and growth prospects of 5 potential candidates. The results? Surprising. You’ll want to grab a copy now and see whether what everyone else says is true. Click here to download now.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Attention Growth Investors: Our latest report, “The Rise of Titans,” gives you a front-row seat on the 7 most influential US stocks today. If you’re passionate about tech and growth, you can’t go wrong with our research. Downloading this FREE report could be the most strategic move you make this year. Click here to get started now.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclosure: Royston Yang does not own shares in any of the companies mentioned.
The post 4 US Stocks That Are Perfect for a Growth Investor’s Portfolio appeared first on The Smart Investor.