It’s a natural desire to grow your money so you can better prepare for retirement. The logical step will be to invest your money in growth stocks that can enjoy steady price appreciation. By doing this, you can grow your money into something much bigger over time.
The key to growing your wealth is to look for companies that can grow their sales and profits sustainably. In other words, these stocks shouldn’t be one-trick ponies that fall away after a short run. What to look for are companies with a strong competitive advantage that have a track record of growing their sales and profits. They also need to have catalysts that can help them continue to grow in the near future.
If you have some extra cash, it’s time to check out these three attractive growth stocks that could help you eventually double your money.
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Cummins(NYSE:CMI) is an energy solutions leader that manufactures and sells a wide range of products such as diesel engines, fuel systems and turbochargers. The company has shown solid growth over the years, with revenue increasing from $24 billion in 2021 to $34.1 billion in 2023. Net profit (excluding special items) rose from $2.1 billion to $2.7 over the same period billion. The company is also a consistent generator of free cash flow, with free cash flow increasing from $1.5 billion in 2021 to $2.8 billion in 2023. Cummins also increased its quarterly dividend per share from $1.35 in 2021 to $1.68 in 2023 .
The company continued to grow in the first nine months of this year, albeit at a slower pace. Revenue rose 0.5% year-over-year to $25.7 billion, while operating income rose 1.5% year-over-year to $3 billion. Net profit rose 63% year over year to $3.5 billion due to a one-time gain on the sale of Atmus, a filtration technology company. Excluding the $1.3 billion non-taxable profit, Cummins’ net income would have risen almost 3% year-on-year to $2.2 billion. The board further increased the company’s quarterly dividend by approximately 8.3% to $1.82.
Cummins shared its growth plan at its recent Investor Day event and management has increased its 2030 targets. The core business is expected to reach revenues of $39 billion to $42 billion by 2030, while generating more than $35 billion in operating cash flow between 2022 and 2030. Accelera, the zero-emissions brand launched in March 2023, is expected to contribute approximately $3 billion to $9 billion in additional revenue. break even in 2027.
Overall, Cummins expects 2030 sales to be between $43 billion and $48 billion, generating $34 billion to $36 billion in operating cash flow. Management has identified the drivers of margin expansion for each of the five business segments and set clear financial targets for steady, sustainable growth. Sales should grow 5% to 7% annually through 2030, while earnings per share should grow between 7% and 9%, driven by persistent themes such as continued OEM outsourcing, global data center investments and growth in the aftermarket segment.
Paycom software(NYSE: PAYC) offers companies a cloud solution for human resources and payroll processing. The company’s platform offers the full suite of services, from onboarding to talent management, allowing customers to streamline processes and increase efficiency. Paycom grew its revenue from $1.1 billion in 2021 to $1.7 billion in 2023, with more than 98% of revenue returning in 2023. Net profit rose from $196 million to $340.8 million in the same period. The company also generated copious and increasing amounts of free cash flow. Free cash flow went from $193.2 million in 2021 to $288.2 million in 2023. The cloud company also paid a consistent quarterly dividend of $0.375 per share since May 2023.
Paycom reported strong earnings for the first nine months of 2024. Revenue rose 10.3% year over year to $1.4 billion, while operating income rose 41% year over year to $485.8 million. Net income rose 50% year over year to $388.4 million. The company also continued to generate healthy free cash flow of $232 million, up 8% year over year.
During Paycom’s recent earnings call, CEO Chad Richardson noted that demand for automated solutions remains strong, acting as a tailwind for the company. The company has developed its artificial intelligence (AI) solutions in-house to improve service response times by 25% and believes there are other opportunities to monetize AI. Paycom also operates in four countries and recently onboarded a multinational manufacturing company, implying there is potential for international expansion. The company still holds less than 5% of the total addressable market, indicating strong opportunities for potential growth in the coming years.
Walmart(NYSE:WMT) operates more than 10,500 stores in 19 countries and employs 2.1 million associates worldwide, including 1.6 million in the US alone. The company has seen steady growth in both revenue and bottom line in recent years, demonstrating the strength of its business model and brand franchise. Revenue increased from $572.8 million in fiscal 2022 (ended Jan. 31) to $648.1 million in fiscal 2024. Net income improved from $13.7 billion to $15.5 billion in the same period.
Another positive is the retailer’s strong free cash flow generation, which rose from $11.1 billion in fiscal 2022 to $15.1 billion in fiscal 2024. This increase in free cash flow helped fund Walmart’s dividend increase , which went from $0.183 to $0.2075 (note: (shares recently underwent a 3-for-1 split). This increase marks the 51st consecutive year that Walmart has increased its dividend, and the recent 9% annualized increase marks the largest increase in more than a decade.
This momentum continued in the first nine months of the 2025 budget year. Total revenue rose 5.4% year-over-year to $500.4 billion, with operating income up 8.8% year-over-year to $21.5 billion. Net profit rose 41% year over year to $14.2 billion, and the retailer continued to generate healthy free cash flow of $6.2 billion, up 43% year over year. In the third quarter alone, Walmart saw global e-commerce sales increase 27%, while global advertising business grew 28%.
Walmart is well positioned for further growth. Earlier this year, the retailer announced that it plans to build or renovate more than 150 stores while also remodeling existing stores. These new or remodeled stores will represent Walmart’s “Store of the Future” concept, featuring improved layouts, a broader product selection and technological advancements to help staff better serve customers and make the shopping experience more enjoyable.
Two months ago, Walmart also expanded its core pet care offering by increasing access to virtual veterinary care and offering pet grooming services, food and pet supplies. Earlier this month, Walmart completed its acquisition of Vizio, allowing advertisers to better reach their customers and improve their shopping journeys. This purchase will help further boost the company’s advertising business. With these initiatives in place, investors can look forward to more growth from Walmart, along with a continued increase in its quarterly dividend.
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Royston Yang has no position in any of the stocks mentioned. The Motley Fool holds and recommends positions in Paycom Software and Walmart. The Motley Fool recommends Cummins. The Motley Fool has a disclosure policy.
Do you have $5000? 3 Best Growth Stocks to Buy That Can Double Your Money was originally published by The Motley Fool
