Stocks are undeniably temperamental, resembling moody house cats. Some pounce to elusively surmount market odds – rewarding their champions with financial fortune. Subsequently, investors meticulously peer at blue-chip stocks, akin to sturdy oak trees steadfastly clinging to the market’s rocky soil. Less volatile when contrasted with high-growth equities, these stalwarts, nonetheless, have a distinct lure for long-term investors, offering a stable ride rather than an adrenaline-packed rollercoaster jaunt.
Chipotle on a Sizzling Streak (CMG)
Chipotle (NYSE:CMG), much like an underdog athlete flipping its losing streak, surges effortlessly as a healthier fast-food haven. The restaurant chain deftly reversed a slump in revenue growth, orchestrating an unparalleled fourth-quarter crescendo. Revenue skyrocketed by 15.4% year-over-year in Q4 2023, outshining its full-year increase of 14.3%. Additionally, Chipotle’s diluted earnings per share soared by 27.3% year-over-year to $282.1 million, warranting an 11.3% net profit margin. Bolstering this triumph, Chipotle unveiled 121 new restaurants, with 110 featuring Chipotlanes – a key driver of growth. Long-term investors have been reaping sizable rewards, with the stock boasting a staggering 44% surge over the past year and an eye-popping 327% surge over the past five years.
Microsoft: The Invincible Giant (MSFT)
Microsoft (NASDAQ:MSFT), a linchpin in many investment portfolios, continues to dazzle with its exceptional returns. The company outshines the market both annually and over a five-year span, occupying a pivotal role in both the S&P 500 and the Nasdaq 100. Microsoft is not a one-trick pony, navigating several growth channels such as cloud computing, artificial intelligence, social media, and gaming. In the Q2 FY24, the tech behemoth reported an 18% year-over-year revenue rise, with its cloud segment shining with a glitzy 24% growth. Microsoft has been employing artificial intelligence as its ace, flavouring its entire tech suite with CoPilot – an AI assistant that facilitates seamless navigation of Microsoft Office products. The company’s investment in a Super Bowl ad for CoPilot is a clear testament to its steely commitment to this latest AI endeavour.
Amazon: The Untamed E-Commerce Titan (AMZN)
Amazon (NASDAQ:AMZN) continues its breakneck growth, steadfastly asserting a 14% year-over-year revenue surge in Q4 2023. The e-commerce colossus displayed unwavering resilience, witnessing accelerated growth in international markets and robust holiday season sales. Armed with its generative AI capabilities, particularly the Bedrock that seamlessly scales AI applications for developers, Amazon promises to remain a formidable force in the stock market. The share prices have been pacing the market, boasting a remarkable 70% jump over the past year and an astonishing 115% leap over the past five years, with North American sales fiercely dominating the company’s net sales landscape, leaving room for further growth in international markets.
Procter & Gamble: The Wheel of Home Essentials (PG)
Procter & Gamble (NYSE:PG) is a flag bearer of household essentials, steadfastly steering its ship through the market’s tempest. Although the stock does not promise meteoric rises, it has still managed a laudable 14% surge over the past year and a solid 60% gain over the past five years. What it lacks in explosive growth, it compensates through consistent dividends, doling them out like a routine, having distributed dividends for an astounding 133 consecutive years, punctuated by 67 consecutive years of dividend hikes. In Q2 FY24, the company reported a modest yet steady 3% year-over-year revenue increase, complemented by a buoyant 16% year-over-year core EPS increase, delineating its steadfast market expansion. Procter & Gamble operates as a fortress in investors’ portfolios during turbulent times, as consumer habits prioritize essentials over discretionary expenses.
Mastercard: The Ace of Credit Cards (MA)
Mastercard (NYSE:MA), outshining its counterpart Visa (NYSE:V), has orchestrated a commendable rally, gifting its investors with a 25% surge over the past year and an impressive 106% over the past five years. The financial titan reported a robust 13% year-over-year revenue leap in Q4 2023, propelling net income to a towering $2.8 billion, boasting an 11% year-over-year growth rate. Leading the charts in revenue growth against Visa, Mastercard spearheads an unparalleled rally. Its low 0.60% dividend yield is counterbalanced by historical dividends, exemplified by a 15.8% year-over-year surge through a quarterly dividend hike – an astounding feat of financial athleticism.
Walmart: The Evergreen Retailer (WMT)
Walmart (NYSE:WMT), an indomitable goliath in retail, adroitly taps into international markets and e-commerce to further solidify its unshakable presence. In the third trimester of 2023, its e-commerce sales surged by 15% year-over-year, a testimony to its enduring market versatility and agility, nimbly adapting to ever-evolving market dynamics. While a surge in gimmick-driven stocks may tantalize investors with fleeting glamour, blue-chip stocks, much like time-tested relics, stand as bastions of stability, grounded in robust fundamentals and unwavering resilience, lighting the path for discerning investors in their quest for enduring returns.
Walmart (WMT)
Walmart (WMT) has recently announced its financial results for the fourth quarter of 2023, revealing a remarkable 5.2% increase in overall sales. The significant growth in e-commerce sales in domestic markets has contributed to its success, while retail store revenue growth has been robust in international markets. However, it’s essential to note that despite a surge of 20% in global advertising revenue, advertising still constitutes a small fraction of Walmart’s total sales.
One of the key selling points for Walmart as an investment is its lower volatility, evident from its 0.49 beta compared to the stock market’s 1.00 beta. Moreover, the company tends to be more resilient during economic downturns due to its focus on providing affordable goods and services. On the flip side, when the economy is thriving, Walmart’s stock can experience significant gains, with shares witnessing a substantial 69% surge over the past five years.
IBM (IBM)
After a prolonged period of stagnation, IBM (NYSE: IBM) has been experiencing a resurgence, with a 37% rise in shares over the past year and an attractive 3.55% dividend yield. The fourth quarter of 2023 saw a notable 4% year-over-year revenue growth for the company, with increased demand for its hybrid cloud and artificial intelligence offerings.
While IBM’s AI peers have seen greater market exuberance, IBM’s modest 23 P/E ratio, with a forward P/E ratio of 18.50, indicates a potential value opportunity. In the same period, the company’s net income surged by 14% year-over-year, suggesting a favorable trajectory for the reinvented company.
Looking ahead, IBM anticipates achieving mid-single-digit year-over-year revenue growth in 2024 and is on track to generate $12 billion in free cash flow. While it may not outperform other tech companies or index funds, investors seeking stability during volatile economic times may find IBM an appealing choice.
On this date of publication, Marc Guberti held a long position in MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.
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