Investing in Growth stocks has been an old technique for investors to increase wealth and they have always kept looking at the best growth stocks to buy. Risk-averse investors ensure that they are investing in stocks that aren’t overvalued. A growth stock is any share in a company that is anticipated to grow at a rate significantly above the average growth for the market.
These stocks generally do not pay dividends. This is because the issuers of growth stocks are usually companies that want to reinvest any earnings they accrue in order to accelerate growth in the short term. Investors carry on finding the best growth stocks to buy because they anticipate that they will earn money through capital gains when they eventually sell their shares in the future.
Verizon Communications (VZ)
Verizon Communications (VZ) is a telecom company that operates worldwide. It’s not glamorous, but for investors seeking a safe and cheap high-yield stock, the telecom industry isn’t a bad place to look. Verizon offers a lot of appeal after an underwhelming 2021.
The company has spent most of the past five years trading between $50 and $60 per share. That means there is very low volatility and the riskiness of VZ stock is minimal. So, what can push the stock that would attract an investor to invest in VZ? The answer in one-line is5G technology.
Verizon is heavily investing in 5G tech. On one side, the inability to capitalize on the 5G upgrade cycle until now has squashed what little momentum Verizon may have had. However, at the same time, the 5G investments should start to pay the returns pretty soon.
Recently, Verizon announced its plans to turn on around 2,000 additional 5G towers in February. The addition of these towers is part of Verizon’s, C-Band 5G deployment. In January 2022, the company turned on about 5,100 towers.
The initial target was to offer the 5G C-Band service to about 90 million people and take the number to 100 million by March 31. Verizon has already achieved the target of 100 million as of Feb. 1. The company now intends to exceed the goal and speed things up.
In the meantime, Verizon continues to enjoy incredible cash flows from its core business. VZ seems to be a reasonable growth stock to buy now.
The Goldman Sachs Group (GS)
A renowned financial institution globally, The Goldman Sachs Group (GS) is an absolute value stock. GS stock is trading for just 6.3 times trailing earnings. That’s in large part due to just how phenomenal 2021 was for the bank.
Goldman Sachs saw improving loan market conditions. That’s mainly due to the rise in investment banking fees and improving results from its wealth management services division. The bank has done a tremendous job in its asset management department.
For instance, Goldman recently helped a leading live-entertainment discovery platform, Fever, to raise $227 million. The round was led by the Growth Equity business within Goldman Sachs Asset Management. GS has been doing a great job in securing deals for its asset management section.
Building on that momentum, Goldman Sachs recently lifted its outlook and profit margin targets through 2025. According to a few analysts, there is some risk of things cooling off a bit in 2022. That’s mainly due to the normalization in earnings after 2021’s euphoria. Even so, based on a more conservative outlook for the new year, analysts have the stock trading for under 10 times forward earnings. Well, that’s a bargain.
Apart from that, the bank pays a fine of 2.1% dividend too. And, with the Federal Reserve looking to hike interest rates, earnings may surprise once again to the upside. Therefore, GS stock is really one to look forward to this year if you are looking at the best growth stocks to buy now.
Ford Motor Company (F)
Ford Motor Company (F) is the old lion in the automobile den. The company had a decent 2021 and has ended it on a high note. The fourth-quarter sales increased by 27% to 508,451 vehicles over the previous quarter. Despite the sales for the FY21 dropping to 6.8%, Ford looks in good shape to pick up the momentum. The question is can Ford become a momentum stock?
It’s certainly looking more and more possible with every passing month. The venerable automaker has suddenly become a hot property. The sales drop last year is marginal. That’s mainly due to supply chain distributions during the year. Well, that’s not a big deal considering it is a value stock.
Ford remains an inexpensive value stock, selling for less than 11 times forward earnings. Investors finally seem to be waking up to the fact that the traditional automakers are actually rather competitive on EVs. With many newbies in the EV space losing in 2021, companies like Ford are suddenly in the game.
Ford is a much safer bet than a firm with a huge valuation but minimal revenues. Ford already has tremendous profitability; it can reward shareholders with a 2% dividend. There is a sense of stability along with huge growth potential for the company. Ford stock should definitely be on your list of best growth stocks to buy now.
Gilead Sciences (GILD)
Gilead Sciences (GILD) is a research-based biopharmaceutical company that has made some big moves during the COVID period. Investors have labeled Gilead Sciences as a value trap.
The most recent development for the company was, FDA has expanded the label for Gilead’s COVID-19 therapy Veklury, to be used in treating non-hospitalized adults. The best thing is that Gilead’s drug clearly benefits outpatients. It reduces the risk of hospitalization or death by 87%. The only problem is that it has to be infused, for three continuous days.
Another huge segment in the COVID vaccine is now captured by GILD. The expansion into kids under 12 could result in some additional sales. The fact that Pfizer’s pill is only approved for adults. Apart from this, the company has obtained FDA approval for chimeric antigen receptor T-cell therapy Yescarta. These are two cruel developments for the company at the start of 2022.
GILD stock has gone nowhere for the past five years despite appearing to be cheap. Why is that so? Well this is understandable. Gilead rose to prominence from a highly successful set of drugs to treat hepatitis C. Previously, the company was unable to immediately follow up that product line with a second act. That caused GILD’s revenues, earnings, and stock price to stall out. The company has moved out of that phase. Analysts are modeling double-digit growth in 2022 as Gilead’s clinical pipeline and acquisitions are kicking into gear and after these prediction GILD have successfully made its place among the best growth stocks to buy now.
GILD stock is one to invest in this year.
FedEx Corporation (FDX)
FedEx Corporation (FDX) is a leading logistics and transportation provider worldwide. The company has been facing the after-effects of the pandemic slump. During 2020, FDX shares soared due to rising demand in e-commerce, which led to an unprecedented need for FedEx’s delivery and logistics services.
Investors were worried that FedEx would be in direct competition with Amazon – as it would steal market share. However, things went differently during the quarantine period. With the rise in online shopping, FedEx had to deal with more orders. Things ended well in 2020, but FedEx had a difficult 2021, facing labor shortages and surging wages. Moreover, the major factor that increased the cost was increasing fuel prices.
With all the complexities of the last year aside, FedEx is still going for just 12 times forward earnings. While the headwinds are real, the company’s earnings more than offset them. Moreover, the company has announced a $1.5 billion accelerated share repurchase program. That will sop up FDX stock while it’s cheap. On top of that, JPMorgan Chase analysts labeled FedEx stock one of their top transportation picks for 2022.
FDX stock can have its time this year, thus it makes our list of the five best growth stocks to buy now.