18 Nov 3 Attractive US Growth Stocks That Can Power Your Portfolio
Different investors naturally have different objectives when allocating their capital.
Some may enjoy the comfort of dividend investing where the businesses they own pay out a steady, dependable dividend.
Others may prefer to invest in companies that are growing at a steady pace.
Yet others rely on the stability and certainty that blue chip businesses provide.
However, if your purpose is to grow your portfolio to a sizable amount and beat inflation, then growth investing is the way to go.
By selecting businesses that have growth catalysts that are in industries with long term tailwinds, your portfolio should experience steady capital appreciation.
Over time, you will accumulate enough to enjoy a comfortable and secure retirement.
Here are three US growth stocks you can consider for your investment watchlist.
Zoom Video (NASDAQ: ZM)
Anyone who has been telecommuting in the last 18 months has probably used Zoom’s video conferencing software before.
The company provides a unified communications platform for individuals and corporations using a cloud-based software platform.
Zoom was already enjoying steady growth before the pandemic but the outbreak saw demand for its services shoot up sharply.
Back in the fiscal year ended 31 January 2017 (FY2017), revenue stood at US$60.8 million.
Within just four years, revenue catapulted nearly 45-fold to US$2.65 billion.
In the process, Zoom turned a net loss of US$14.4 million in FY2017 to a net profit of US$671.5 million for FY2021.
The momentum has carried forward into the current fiscal year, with Zoom reporting a year on year doubling of revenue to US$1.98 billion for its fiscal 2022 first half (1H2022).
Net profit soared by 155.8% year on year to US$544.3 million.
The company is seeing its customer base expand.
Customers with more than 10 employees grew by 36% year on year to 504,900 for its fiscal 2022 second quarter.
CEO Eric Yuen has plans for further growth.
In early 2022, he intends to launch a video engagement centre, a cloud-based contact centre solution, that will help to connect businesses with their customers.
Meanwhile, a new service known as Zoom Events will cater to customers’ need to host virtual and hybrid events.
Parker-Hannifin Corp (NYSE: PH)
Parker-Hannifin, or PH, is a global leader in motion and control technologies.
It manufactures components and parts for a wide variety of industries including aerospace, life sciences, industrial equipment manufacturing, and power generation.
The company achieved stable sales over the last three fiscal years from FY2019 to FY2021 while its net profit climbed by 14.5% over the same period to US$1.7 billion.
For its fiscal 2022 first quarter (1Q2022) ended 30 September 2021, however, saw records for sales and net profit.
Sales increased by 17% year on year to US$3.76 billion while net profit surged by 41% year on year to US$451.2 million.
Total orders for the group also increased by 26% year on year, reflecting continued strong demand for PH’s diverse range of products.
The directors also declared a quarterly dividend of US$1.03 per share.
PH has increased its annual dividends for 65 consecutive years and this dividend is the company’s 286th consecutive quarterly dividend.
The company is also growing through acquisitions, with its US$8.8 billion acquisition of aerospace components firm Meggitt plc (LON: MGGT) receiving approvals from the latter’s shareholders.
This transaction is expected to conclude by the third quarter of 2022.
Raytheon Technologies Corp (NYSE: RTX)
Moving on to another engineering company, Raytheon is one of the largest aerospace and defence manufacturers in the world.
The company is advancing research on flight technology, building smarter defence systems, and exploring intelligent space technologies.
From its fiscal year 2016 (FY2016) to FY2020, net sales nearly doubled from US$28.5 billion to US$56.6 billion.
For the first nine months of 2021 (9M2021), net sales increased by nearly 18% year on year to US$47.3 billion.
Net profit clocked in at US$3.2 billion for 9M2021. For 9M2020, PH reported a net loss due to goodwill impairment of close to US$3.2 billion.
For the first nine months of the year, free cash flow was a healthy US$2.7 billion.
Raytheon also declared a quarterly dividend of US$0.51 per share and has paid dividends on its shares since 1936.
The company has also been active on the acquisitions front.
In August, it acquired privately-held FlightAware, a digital aviation company providing global flight tracking solutions and predictive analytics.
A month later, Raytheon signed an agreement to acquire SEAKR Engineering, a leading supplier of advanced space electronics.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.