08 Apr 4 Stocks That US Growth Investors Should Be Looking At
Growth investors prefer companies that are increasing their revenue and earnings.
When businesses can do this, it makes them more valuable, prompting investors to bid up their share prices.
Stocks that report consistently higher profits and cash flows should see their share prices increasing steadily over the years.
Growth investors thus enjoy capital gains when owning these companies.
The US stock market is a great place to hunt for growth stocks.
Companies with strong franchises that can ride on sustainable trends are prime candidates for long-term capital appreciation.
Here are four stocks that growth investors may want to include in their watchlists.
Mastercard (NYSE: MA)
Mastercard should be no stranger to most, being one of the largest global payment companies in the world.
Likely, you may even have a Mastercard debit or credit card in your purse or wallet.
The company reported a 9% year on year growth in the number of cards it issued to 2.98 billion at the end of its fiscal 2021 (FY2021).
Mastercard also saw a recovery in FY2021 as spending resumed its upward trajectory.
The number of transactions in the fourth quarter of FY2021 (4Q2021) was 27% higher year on year, while cross-border volume surged by 53% year on year.
Gross dollar volume jumped by 23% year on year to US$2.1 billion.
Mastercard’s revenue increased by 23.4% year on year to US$18.9 billion while operating profit improved by 24.8% year on year to US$10.1 billion.
Net profit surged by 35.5% year on year to US$8.7 billion.
The company also declared and paid out a quarterly dividend of US$0.49 per share.
Mattel (NYSE: MAT)
Mattel is one of the largest toy companies in the world and is famous for brands such as Barbie, Hot Wheels, and Thomas & Friends.
For FY2021, net sales rose 19% year on year to US$5.46 billion while operating profit soared 95% year on year to US$729.6 million.
Net profit benefitted from an income tax credit and jumped more than sevenfold year on year to US$903 million.
The company announced that its turnaround is complete and that it is now poised to grow.
According to the NPD Group’s Retail study, Mattel was the number one toy company in 4Q2021 and gained market share globally for the second consecutive year.
Its 2022 guidance estimates that sales will grow around 8% to 10% with continued high-single-digit year on year growth in 2023.
FY2021 also saw free cash flow doubling year on year to US$334 million.
The company’s near-term objectives include building its capabilities, expanding the number of toy categories it is in, and increasing its production capacity.
ULTA (NASDAQ: ULTA)
ULTA is the largest beauty retailer in the US and operates 1,308 retail stores across 50 states as of 10 March 2022.
The company has a wide-ranging inventory of more than 25,000 products from more than 600 beauty brands across various categories and price points.
The beauty retailer had a strong showing for FY2021, with revenue jumping 40.3% year on year to US$8.6 billion.
Operating profit surged more than five-fold from US$236.8 million to US$1.3 billion while net profit soared to US$985.9 million from US$175.8 million a year ago.
The better numbers were due to improved customer demand, government stimulus payments, and the gradual easing of COVID-19 restrictions.
ULTA’s loyalty program has seen membership rise to 37 million, a five-year high.
The company plans to evolve its omnichannel experience and expand and deepen its presence and has set a financial target of achieving 5% to 7% per annum revenue growth from 2022 to 2024.
Wingstop (NASDAQ: WING)
If you are in the mood for fried chicken wings, then you should check out Wingstop.
Founded in 1994, the company operates and franchises more than 1,700 restaurants worldwide and serves a variety of chicken wings and tenders in 11 different flavours.
For FY2021, Wingstop reported a 13.5% year on year rise in revenue while operating profit climbed 28.5% year on year to US$73.8 million.
Net profit soared 83% year on year to US$42.7 million.
The company had the bulk of its restaurants in the US, with just close to 200 restaurants in non-US locations.
The chicken wing specialist intends to open around 200 new restaurants this year and also paid out a quarterly dividend of US$0.17 per share.
Just two months ago, Wingstop unveiled its “restaurant of the future”, a new cashless, digitally-focused prototype that is suitable for rapid testing of numerous flavours and is fully operable in a crowded location.
Disclaimer: Royston Yang owns shares of Mastercard.