With the Federal Reserve potentially poised to raise interest rates again, there is a temptation to avoid long-dated growth stocks altogether. Should borrowing costs rise sharply, this momentum would thwart expansionary initiatives. Of course, this does not bode well for growth-oriented companies.
However, some companies in this category have relevant underlying narratives. Equally important, they get backing from Wall Street analysts. While it’s never wise to rely solely on one source of information, here’s the reality: These people evaluate various market opportunities to make a living. Most of the time they should be right. With that in mind, all of the long-term growth stocks listed below offer strong double-digit percentage return potential. If you have the patience, here are some compelling ideas to consider.
| PSX | Philip 66 | $106.02 |
| ELV | Elevance Health | $470.24 |
| CCJ | cameco | $28.31 |
| MCS | Mark | $16.00 |
| GM | General Motors | $41.01 |
| ENPH | Enphase Energy | $217.16 |
| BTI | British American | $38.04 |
Phillips 66 (PSX)
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A downstream energy giant, Philip 66 (NYSE:PSX) is engaged in the refining, transportation and marketing of natural gas liquids and petrochemicals. Although the policy framework appears to exclusively support green energy initiatives, the reality is that hydrocarbons will be with us for a long time. Scientifically, few other energy sources have the energy density of fossil fuels.
Furthermore, it’s not just the narrative that makes PSX one of the long-term growth stocks to buy. Objectively, the market rates PSX at a trailing multiple of 4.67. At a discount to earnings, Phillips 66 performs better than 70.64% of the competition. Also, PSX is trading with a trailing sell multiple of 0.29. This is well below the sector median of 1.02. In particular, PSX is a strong performer on the charts. It has gained over 6% in share value since opening in January. And over the past year, it’s up over 27%.
Finally, Wall Street analysts view PSX as a consensus moderate buy. Additionally, their average price target is $127.11, which means over 18% upside potential.
Elevation Health (ELV)
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a health insurance, Elevance Health (NYSE:ELV) offers services for various industries and applications. These include medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans. Given the shock to the system brought on by the coronavirus pandemic, people arguably have a more appreciative perspective on the insurance industry.
Elevance currently has a market cap of $111.53 billion. Since the beginning of the year, ELV has given up nearly 7% of its stock value. However, over the last year it has been in positive territory, up just over 1%. Financially, Elevance offers a solid profile overall. For bargain hunters, ELV offers a price to earnings growth ratio of 1.29. The sector median value, on the other hand, is 1.6 times. Operationally, the company’s three-year revenue growth rate is 17.2%, ahead of almost 69% in the industry.
Looking ahead, cover analysts think ELV is a strong consensus buy. Also, their average price target is $577.44, which means over 23% upside potential. Therefore, it’s an intriguing example of buying long-term growth stocks.
Cameco (CCJ)
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Sponsor of the world’s largest publicly traded uranium company, cameco (NYSE:CCJ) has a controversial but misunderstood reputation. Apparently, the fear of core meltdowns resonates with the public. However, scientific realities are forcing people to examine CCJ’s positive narrative. Nuclear fuel simply has amazing energy density.
Basically, a uranium fuel pellet has as much energy potential as 17,000 cubic feet of natural gas. Or, if you want to look at it another way, it’s the equivalent of either 149 gallons of crude oil or a ton of coal. With nothing else coming close, CCJ is easily one of the long-term growth stocks to buy.
However, to be fair, Cameco requires an extra dose of patience. First and foremost, equities have an overvalued profile. However, the company enjoys decent balance sheet stability, so don’t overlook it just yet. Also, Wall Street analysts love CCJ and are unanimous in recommending it a Strong Buy. Additionally, their average price target is $35.91, which represents an upside potential of almost 29%. As such, it’s one of the long-term growth stocks to buy.
Markus (MCS)
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If you know the name Mark (NYSE:MCS), it’s probably because you’re familiar with its properties. Otherwise, it slips under the radar. However, as US migration patterns continue to evolve, MCS could be a massive buying opportunity among long-term growth stocks.
Basically, Marcus consists of two business segments: hotels and resorts and cinemas. The latter offers significant upside potential, in my view. Located in smaller cities and regions, Marcus Theaters can benefit from millennials moving from expensive metropolitan areas to the suburbs. If so, Marcus could clean up.
Currently, the market rates MCS at a trailing sell multiple of 0.84. As a discount to sales, Marcus performs better than 63.49% of the competition. Also, MCS is trading at 1.1 times book value. In contrast, the industry median is 1.57. So far, two analysts are covering MCS and both rate it as a buy. Also, their average price target is $22, which means upside potential of almost 38%. As such, it’s a quiet but telling example of long-term growth stocks.
General Motors (GM)
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an american icon, General Motors (NYSE:GM) has sort of come full circle. Apparently, the automaker suffered an ignominious bankruptcy after the Great Recession. When the Covid-19 crisis hit, he seemed poised to repeat the ugliness. However, sentiment rushed back, making it a top idea. Moving forward, GM is among the best long-term growth stocks to buy.
Basically it runs on all cylinders. Most notably, GM has invested heavily in the electric vehicle space. Additionally, by electrifying marquee models like the Hummer, GM can nurture nostalgia with current-generation technologies. However, as the latest generation Corvette proves, the company refuses to belittle its geared fan base. For that I have to give GM some props.
Additionally, the automaker represents an attractive proposition for bargain hunters. The market currently rates GM at a forward multiple of 6.39. At a discount to revenue, General Motors performs better than 84.18% of the competition. Finally, Wall Street analysts think GM is a consensus moderate buy. Additionally, their average price target is $53.45, which represents a 38% upside potential.
Enphase Energy (ENPH)
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an energy technology company, Enphase Energy (NASDAQ:ENPH) develops and manufactures solar micro-inverters, battery energy storage systems and electric vehicle charging stations mainly for private customers. Basically, rising utility bills and climate change should boost ENPH as one of the long-term growth stocks to buy.
As the events of the new normal disrupt the supply chain of critical resources, these dynamics are negatively impacting the broader energy space. In turn, prices are rising, leading apartment unit owners to consider solar energy. Additionally, warmer temperatures have caused power outages across the country. Enphase can also help here with its battery storage systems. Though shares have accelerated significantly — up nearly 30% over the past year — Enphase currently offers an enticing opportunity. Its operational stats, in particular, are just insane.
Better still, Wall Street analysts still think there’s more to ENPH and consider it a moderate Buy. Their average price target is $303.94, which represents almost 43% upside potential.
British American Tobacco (BTI)
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For the final idea of buying long-term growth stocks, I’m going to take a somewhat controversial and seemingly nonsensical approach. Pretty sure, British-American Tobacco (NYSE:BTI) will not be for everyone, even in the context of willful adult liberties. However, the relevance or lack of a BTI could bother investors the most. Finally, global smoking prevalence has declined over the years.
Also, it’s not just an isolated statistic. Other research indicates that global tobacco use has declined. In virtually all circumstances, this framework should not bode well for BTI. However, increasing stress from economic and geopolitical headwinds can lead to increases in smoking rates. In addition, large tobacco companies invested heavily in vaporizers or e-cigarettes. This, too, should help boost BTI stock.
For those willing to take the risk, British American offers a discount. The market currently rates BTI at a forward multiple of 8.1. As a result discount, the company performs better than 75% of its peers. Finally, two analysts are covering BTI, both recommending a buy. Their average price target is $57.34, which means over 51% upside potential.
On the day of publication Josh Enomoto had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author and are governed by InvestorPlace.com Posting Policies.
