FIX - Hidden Gems: 3 Growth Stocks That Will Reward Patient Investors Handsomely
2024-05-27 13:52:12 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Identifying the best growth stocks for patient investors is a worthy cause. These stocks are typically characterized by their potential to grow at an above-average rate compared to the broader market.
While growth stocks can offer enticing long-term growth prospects, it’s crucial to remember that true growth takes time and patience. Moreover, it’s essential to evaluate factors such as revenue growth, profit margins, and cash flows to position these companies for future success. For investors willing to adopt a long-term perspective, growth stocks can be a rewarding addition to a diversified portfolio.
Let’s discover the three best growth stocks for patient investors to snap up in May!
Dollarama (DOL)
Dollarama (TSE: DOL.TO ), a Canadian discount retailer, has carved a niche by offering a wide range of products at competitive prices. The company has thrived since the pandemic as consumers battle inflation and higher interest rates.
One of the key factors contributing to Dollarama’s success is its sufficient supply chain management and low prices. The company’s direct sourcing model allows it to negotiate favorable terms with suppliers, ensuring competitive prices for its consumers. Furthermore, over the last decade, the company has offered a more comprehensive range of products, allowing it to compete with big box retailers and grocery stores. In FY24 , Dollarama saw record revenue of $5.86 billion. Comparable sales grew 12.6%, driven by strong operations execution.
Additionally, EPS increased 29% YOY to $3.56 per share, with FCF and net income surpassing $1 billion for the first time. Their business model and the compelling, valuable proposition are resonating with customers. This makes DOL stock one of the top growth stocks for patient investors in 2024.
Emcor Group (EME)
Emcor Group (NYSE: EME ) is a leading provider of mechanical and electrical construction services in a market with significant growth potential. Its expertise in these vital services makes it one of the most compelling growth stocks for patient investors to buy now.
Emcor Group has been on an absolute tear over the last five years. The stock has significantly outperformed the broader market, rising 394% as compared to the S&P 500’s 101%. Investors anticipate growth to continue, driven by strong demand for infrastructure projects in the healthcare and technology sectors.
Moreover, the company’s growing revenue, earnings, and cash flows are another positive sign for the future. In FY23 , revenue increased 13.6% YOY to $12.58 billion. EPS skyrocketed 64.7% YOY to a record $13.3 per share while generating $711 million in FCF. Management has also initiated strong forward guidance for the 2024 fiscal year. Emcor’s acquisition strategy is working, expanding its geographical reach and enhancing its long-term growth prospects.
Comfort Systems USA (FIX)
Comfort Systems USA (NYSE: FIX ) is revving up for another strong year in 2024. Their expertise in heating, ventilation, and air conditioning (HVAC) services makes them well-positioned to benefit from the rise in global infrastructure spending.
Comfort Systems started off as an extremely small company that only started to hit its stride during the pandemic. The company has seen an acceleration in revenue growth and profitability as demand for HVAC services has increased substantially. Thankfully, their expertise in the fragmented HVAC market and strong brand reputation have led to repeat business. This is something that the company prides itself on, and its focus on energy-efficient HVAC solutions gives it a competitive advantage.
In the 2023 fiscal year , revenue increased 26% YOY to $5.2 billion. EPS swelled 32% YOY to $9.02 per share as strong operational execution drove profitability. As demand for sustainable HVAC services continues to increase, FIX stock remains one of the best growth stocks for patient investors to buy in May.
On the date of publication, Terel Miles 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 .
Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.
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