Investors load up on growth stocks hoping that they can outperform popular market indices like the S&P 500 and the Nasdaq Composite. While it’s possible for individual picks to exceed these funds, picking wrong can result in losses.
Savvy investors have to navigate the potential of high returns with considerable downside. Truly, no growth stock can guarantee a high return. But you can increase your chances by seeking corporations with rising revenue and profit margins.
While short-term momentum can result in sizable gains, a company’s financial growth, balance sheet and catalysts determine its long-term returns. Investors who set lengthy time horizons can see more of those catalysts play out. You don’t have to pursue speculative stocks to beat the market. Some corporations are already well-known and have been around for decades. Places you shop at regularly and companies you’ve heard of several times can be the leaders in your portfolio.
Therefore, these are some of the top growth stocks to consider.
Comfort Systems USA (FIX)
Comfort Systems USA (NYSE:FIX) offers air conditioning installation, maintenance, repair and replacement services for commercial and industrial clients. The company has a very impressive dividend history, going from a quarterly payout of $0.20 per share to $0.30 per share in one year. The HVAC company usually raises its dividend at least twice per year.
The firm recently reported impressive results in the first quarter of 2024. Revenue increased by 31% year-over-year (YOY) to reach $1.54 billion. Meanwhile, net income grew by 68% YOY to reach $96.3 million. Chief Executive Officer (CEO) Brian Lane mentioned that the company’s new acquisitions are off to great starts. Comfort Systems USA currently has a $5.91 billion backlog, which is a 33% YOY improvement from a $4.44 billion backlog in the same quarter last year.
Also, FIX has been outperforming the stock market. Shares are up by 50% year-to-date (YTD) and have gained 517% over the past five years. It trades at a 30 P/E ratio and offers a 0.39% yield. The air conditioning firm has an $11 billion market cap.
Chipotle (CMG)
Well-loved Chipotle (NYSE:CMG) continues to attract customers despite periodically raising its prices. The fast food restaurant chain offers healthier food choices than competitors, which has helped Chipotle outperform the stock market. Shares are up by 43% YTD and have soared by 352% over the past five years.
First quarter results suggest that the trend will continue. Revenue increased by 14.1% YOY to $2.7 billion. Diluted earnings per share came to $13.01 per share which is a 23.9% YOY boost. Also, Chipotle opened 47 new restaurants during the quarter and remains on pace to open 285-315 restaurants this year.
The stock has attracted more attention due to its upcoming 50-for-1 stock split. This split will make the price per share more affordable for people who prefer to own large quantities of entire shares versus a fractional share. The upcoming split will also increase options trading activity for the stock which will lead to more volatility.
Crowdstrike (CRWD)
Crowdstrike (NASDAQ:CRWD) offers an essential service for small businesses and corporations. It protects data and valuable digital assets from cyberattacks. The hacking industry has become lucrative, and artificial intelligence (AI) is making it easier for bad actors to infiltrate companies at scale.
Cybersecurity solutions like Crowdstrike allow businesses to detect and eliminate threats before they get into your system. A single cyberattack can wipe out a small business, and corporations can end up losing millions of dollars between legal fees, lost customer loyalty and digital assets getting released into the public.
Crowdstrike has delivered exceptional returns for its investors while serving numerous companies. Shares are up by 40% YTD and have gained 441% over the past five years. A strong Q1 of 2025 earnings report indicates that the growth should continue. Revenue increased by 33% YOY while net income came to $42.8 million compared to $0.5 million in the same quarter last year.
On this date of publication, Marc Guberti held long positions in FIX and CRWD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.