Most investors are happy chasing the returns from the S&P 500. The time-tested method repeatedly for investors. For investors who seek to outpace the S&P 500’s average annual 10% returns, options abound.
Certain shares are expected to grow at a rate above 10% over the next year, meaning they have the potential to double an investor’s capital quicker. Importantly, these stocks are also relatively stable and aren’t simply penny stocks that may or may not lose substantial value quickly.
So how quickly can investors expect such an investment to double in value? The S&P tends to double in value every 6 to 7 years with an average return of 10%. The stocks discussed below should do so twice as quickly.
Seadrill Limited (SDRL)
Seadrill Limited (NYSE:SDRL) is an offshore drilling contractor that is expected to grow by approximately 25% this year. At that rate, its stock would double roughly 2.5 times as quickly as would a broad investment in the S&P 500.
The company offers a wide variety of choices from platform ships to rigs that operate in shallow water all the way to ultra deep water.
The irony in the strong analyst expectations around Seadrill Limited is that the company’s fundamentals are flat lately. In addition, the company expects 2024 to be somewhat difficult with longer shipyard stays. Recently, the company operates approximately a dozen rigs at any given time.
Finally, the company has a $2.9 billion dollar backlog while also having initiated its first stock buyback program in late 2023.
Dynatrace (DT)
Dynatrace (NYSE:DT) represents a security platform in an age when IT security demand is rising. The emergence of artificial intelligence (AI) has increased the overall demand for services like those of DT.
With the platform applicable to multicloud environments, Dynatrace helps companies automate their cloud services when those services are provided by multiple firms. That could be a combination of public clouds, private clouds, or some combination thereof.
Impressively, DT is expected to grow by roughly 30% this year, or roughly triple that which is to be expected from the S&P 500.
Finally, a report that surveyed 1300 CIOs indicated that growth in multicloud usage is expected to rise. The sheer amount of data produced will soon be too much for humans to handle alone. Therefore, Dynatrace should be a primary beneficiary of that growth.
United Airlines (UAL)
United Airlines (NASDAQ:UAL) is one of the better stocks to pick up under $50. The company continues to deal with a post-pandemic hangover that has left it with significant additional debt. Thus, result is UAL is extremely cheap at the moment. And that is one reason to believe that it’s shares could double quicker than the S&P 500.
The P/E ratio and the P/S ratio stand impressive. Investors are currently paying roughly half of what they have over the past decade for a dollar of United Airlines’ earnings. That means UAL stock is ranked better than 86% of its competitors by that metric. The same is true for the price to sales ratio. UAL’s P/S ratio tells the same story. It’s roughly half of where it has been over the past decade and better than 86% of its competitors.
Therefore, loads of potential exist in investing in United Airlines. Just as important, the company’s fourth quarter earnings show strong continued growth.
— Alex Sirois
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Source: Investor Place