In this article, we discuss 5 high growth high margin stocks to buy. If you want to see more high growth high margin stocks to buy, the risk/reward, and methodology of this list, go directly to 11 High Growth High Margin Stocks to Buy.
5. Visa Inc. (NYSE:V)
EPS Next 5 Year Ratio According to FINVIZ.com: 15.48%
Profit Margin According to FINVIZ.com: 49.20%
Visa Inc. (NYSE:V) is the leader in the financial payments market with substantial network effects. Given there are only a few big competitors, Visa Inc. (NYSE:V) has high profit margins. For fiscal year 2022, Visa Inc. (NYSE:V) had GAAP net income of $15 billion, adjusted net income of $16 billion and net revenues of $29.3 billion. Although the high margins normally attract competition, Visa Inc. (NYSE:V) has nevertheless grown over time given the overall growth in payments. Analysts expect the company to increase its EPS by an average of 15.48% a year over the next 5 years, ranking #5 on our list of 11 High Growth High Margin Stocks to Buy. It remains to be seen whether there will be new meaningful competition in the future.
4. Alphabet Inc. (NASDAQ:GOOG)
EPS Next 5 Year Ratio According to FINVIZ.com: 15.51%
Profit Margin According to FINVIZ.com: 21.20%
Alphabet Inc. (NASDAQ:GOOG) is a company with more competition now in its core market of search given Microsoft has integrated AI into its Bing search engine. Although the AI makes mistakes, Google could potentially still lose market share and its costs could go up. Up to today, search is such a profitable business that Alphabet Inc. (NASDAQ:GOOG) has had high margins for a company its size. Analysts expect Alphabet Inc. (NASDAQ:GOOG) to increase its EPS by an average rate of 15.51% a year over the next 5 years but the market is pricing in slower growth and possibly EPS decreases given the company’s lower valuation.
3. Mastercard Incorporated (NYSE:MA)
EPS Next 5 Year Ratio According to FINVIZ.com: 20.34%
Profit Margin According to FINVIZ.com: 44.70%
Mastercard Incorporated (NYSE:MA) is another leading payments company with high profit margins. In the fourth quarter, the company had net income of $2.5 billion and net revenue of $5.8 billion, giving it a profit margin of 43.1%. Given the expected continued increase in credit card usage, Mastercard Incorporated (NYSE:MA) has an EPS Next 5 Year Ratio of 20.34%. Considering high margins attract competition, it remains to be seen whether there will be any meaningful new competition to Mastercard Incorporated (NYSE:MA). If there is, growth and margins could decrease.
2. Eli Lilly and Company (NYSE:LLY)
EPS Next 5 Year Ratio According to FINVIZ.com: 22.64%
Profit Margin According to FINVIZ.com: 19.90%
Eli Lilly and Company (NYSE:LLY) is a leading maker of medicines that can sometimes have high margins given their pricing. Considering incomes in many emerging market countries are rising, the overall demand for Eli Lilly and Company (NYSE:LLY)’s medicines is expected to increase. In terms of growth estimates, analysts expect the company to increase its EPS by an average of 22.64% a year over the next 5 years and as of 2/25, Eli Lilly and Company (NYSE:LLY) shares trade for a forward P/E ratio of 27.55.
1. ASML Holding N.V. (NASDAQ:ASML)
EPS Next 5 Year Ratio According to FINVIZ.com: 29.80%
Profit Margin According to FINVIZ.com: 26.60%
ASML Holding N.V. (NASDAQ:ASML) ranks #1 on our list of 11 High Growth High Margin Stocks to Buy given its EPS Next 5 Year Ratio of 29.8%. Semiconductors are essential for many of today’s high tech products such as computers and smartphones. With AI processing likely to increase in the future, demand for semiconductors will also increase as a result. Given ASML Holding N.V. (NASDAQ:ASML) is the leader in its sector of the semiconductor production equipment market, the company has fairly high margins as well. ASML Holding N.V. (NASDAQ:ASML) has a forward P/E ratio of 25.15 and a dividend yield of 1.61% as of 2/25.
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