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Investors often find themselves chasing the next big thing, but sometimes steady growth is the way forward. Instead of fixating on the next Tesla (NASDAQ: TSLA) or Nvidia (NASDAQ: NVDA), the focus should be on companies with a strong track record of growth and stability. While they may not be the most glamorous picks, these companies can offer consistent gains over time.
As we step through February 2024, we explore three stocks with solid potential for steady growth moving forward.
Marriott International (MAR)
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Marriott International (NASDAQ:MAR) dominates the global hospitality sector with nearly 8,700 properties across 139 countries. With its stock almost doubling over the past 5 years, driven by robust revenue, EPS and FCF growth, Marriott is poised for further upside through 2030 despite the recent turmoil in the sector. Although the pandemic and subsequent economic challenges have hindered the industry, the company anticipates a rebound in international tourism in 2024.
In FY23, Marriott expanded its global room count by 81,300, marking a 4.5% year-on-year net room growth. It also recorded a 15% increase in Revenue per Available Room (RevPAR), driven by double-digit growth in international markets. Looking ahead, the company expects a 3-5% rise in RevPAR for FY24, translating to approximately $5 billion in adjusted EBITDA. With these promising indicators, MAR stock merits attention as a prime steady growth stock for 2024.
Automatic Data Processing (ADP)
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Automatic Data Processing (NASDAQ:ADP) has been the forerunner in human capital management for several decades. Commencing with payroll automation, the company now provides a comprehensive suite of HR, payroll, and administrative services to over 1 million companies.
Beyond payroll, ADP aids firms in overseeing their entire workforce, encompassing talent acquisition, onboarding, benefits administration, and tax compliance. Its cloud-based solutions streamline intricate HR processes and deliver vital insights into company data. ADP’s strong financial performance and commitment to returning value to shareholders underscore its standing as a transformative business.
Concluding a robust 2023 fiscal year, the company is already showing positive momentum in 2024. With revenue up 6% year-on-year to $4.6 billion in its recent quarterly financial results, and a 20 basis point increase in adjusted EBITDA margin to 24.6%, ADP continues to exhibit impressive customer retention and bookings. CEO Maria Black’s exceptional leadership and dedication to driving customer satisfaction contribute to the stock’s appeal, particularly given the 10% CAGR in its dividend over the last decade.
PepsiCo (PEP)
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PepsiCo (NASDAQ:PEP) is a preeminent multinational food and beverage company headquartered in Harrison, New York. In addition to its robust portfolio, the company handles the manufacturing, distribution, and marketing of its products.
PepsiCo’s leading brands, such as Pepsi, Lays, Quaker, Gatorade, Doritos, and Ruffles, have gained traction, and its recent foray into healthier food options following the acquisition of BFY Brands in late 2019 has been promising. Furthermore, its strength in international markets is notable, with a 38% surge in operating profit in Latin America during the 2023 fiscal year.
Despite supply chain challenges, management remains sanguine about delivering growth in 2024, affirming a 4% organic revenue growth and 8% EPS growth. With a resilient consumer base and easing supply chain headwinds, earnings in the 2024 fiscal year could surpass estimates. Additionally, the company announced a 7% boost in its annual dividend, marking its 52nd consecutive annual increase.
The breadth and depth of these three stocks are accompanied by bright forecasts, making them compelling prospects for investors seeking steady, long-term growth.
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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
