Despite continued macro uncertainties in the global economy, growth stocks have continued to be on a tear. While it may be tempting to take profit with some of these winners, among them are stocks best considered to be growth stocks to hold.
Yes, there are some growth stories out there where it may be wise to “take the money and run,” as the saying goes. Stocks in sectors like generative artificial intelligence have skyrocketed in value. Perhaps, to an extent where a price correction is inevitable.
However, with other top-performing growth stocks, the party may just be getting started. Although future gains could arrive at a less rapid pace, over a long time frame these stocks have the potential to produce above-average rates of return, and not just from price appreciation. Many of these high-growth stocks also score well when it comes to their dividend growth track records.
With this in mind, let’s take a look at the following seven growth stocks to hold, and see why each one could keep on winning.
CACI International (CACI)
Based in Reston, Virginia, CACI International (NYSE:CACI) is a major contractor to the U.S. Federal Government, providing IT solutions to intelligence, defense, and civilian agencies. In recent years, the company has benefited from steady revenue and earnings growth. In turn, this has led to above-average price performance for shares.
For instance, in the past year, CACI stock has rallied by more than 24%. Over the past five years, shares have more than doubled, and over the past decade, CACI is up over sixfold. Yet while shares have made such a significant leap higher, it’s not as if they have become overvalued. CACI International trades for a reasonable 20.9 times forward earnings.
The company continues to score big ticket contract wins, such as a recently-awarded $2 billion task order from NASA. Rising geopolitical tensions around the world may also serve as a tailwind. Hence, CACI remains poised to continue delivering double-digit rates of earnings growth. With a valuation in line with peers, multiple expansion may not be in the cards, but even if shares simply rise in tandem with earnings growth, this may result in continued outsized price appreciation.
CRA International (CRAI)
CRA International (NASDAQ:CRAI) is a research and consulting firm, serving clients across multiple sectors. In the two preceding quarters, CRA handily beat sell-side earnings estimates, with a 53 cent per share earnings beat in Q4 2023, and a 56 cent per share earnings beat in Q1 2024.
This series of earnings toppers has played a big role in sending CRAI stock significantly higher so far this year. Since January, shares have gained by over 71%. Yet while those holding CRA International right now may be tempted to take profit, much suggests that, instead of a “take the money and run” situation, CRA is one of the growth stocks to hold. Although pricey at 27.6 times forward earnings, this multiple is in line with other consulting stocks.
Furthermore, based on the prior earnings beats, it’s possible that future forecasts continue to lean on the conservative side. Subsequent quarters could bring more positive surprises, sparking a continued rally. Alongside the potential for additional gains, dividend growth trends also bode well for investors in CRAI. While a 0.98% forward yield may not seem too exciting, CRA’s payouts have grown by an average of 16% annually over the past five years.
Ensign Group (ENSG)
Ensign Group (NASDAQ:ENSG) is a name I’ve noted multiple times in the past as being one of the best growth stocks. Most recently, back in May, when I lauded the skilled-nursing facility operator’s shares for their strong past performance, as well as their strong chances for this strong performance to carry on into the future.
So, what in particular makes ENSG stock a top growth play to buy and hold? It all has to do with the company’s roll-up acquisition strategy. Ensign is constantly acquiring existing skilled-nursing facilities. Just in the past few months alone, three facilities have been acquired, with one purchased in May, and the other two purchased in June. After making an acquisition, Ensign Group then goes to work improving the operations of the newly-acquired facility.
The resultant cost savings fall to the bottom line, resulting in consistent earnings growth for the company. Since last writing about ENSG, sell-side estimates have largely stayed as-is. Consensus calls for earnings growth of around 10.6% in 2025, and 8.9% in 2026. As I have also noted before, ENSG has built up a strong dividend growth track record, with seven years of consecutive dividend growth.
Hawkins (HWKN)
Hawkins (NASDAQ:HWKN) is one of the growth stocks to hold that’s really flying under the radar. Shares in this water treatment chemicals company may not be well-known among most investors, yet those in the know have profited greatly from entering buy-and-hold positions in HWKN over the past few years.
Since last July, HWKN stock has rallied by over 95%. Over the past five years, shares have gained by more than fourfold. Why have shares performed so well? Largely, through the steady acquisition of smaller peers in its industry. This has resulted in material earnings growth. Per a May 2024 investor presentation, the company’s earnings have grown at a rate of 26% annually since 2019. As Hawkins sticks to this strategy, outsized levels of growth are likely to continue.
This will likely enable HWKN shares to maintain and grow its valuation. A burgeoning bottom line also points to further dividend growth. Hawkins currently has a forward dividend yield of just 0.7%, but the company has increased its dividend during each of the past 13 years. The most recent dividend increase was implemented last August, when the quarterly payout was increased by 7%, from 15 to 16 cents per share.
Mama’s Creations (MAMA)
Over the past five years, Mama’s Creations (NASDAQ:MAMA) has gone from penny stock obscurity, to becoming one of the standouts among micro cap growth stocks. During this time, shares in the prepared deli foods purveyor have rallied from around 50 cents to nearly $7 per share.
Although MAMA stock has become richly-priced since breaking through the “penny stock ceiling,” there may be a path for shares to continue hitting new highs in the years ahead. Mama’s Creations is focused on one of the faster-growing segments of the grocery space. The company is also maximizing the opportunity in this space, by expanding its product offerings via acquisitions.
Add a management team that includes Mondelez International (NASDAQ:MDLZ) alums in the CEO and CMO roles, and it appears that MAMA has the ingredients in place to remain a top-performing growth story. Given that the stock today trades for around 45.5 times forward earnings, subsequent gains may come in more slowly. However, if earnings live up to forecasts calling for 50% growth between 2025 and 2026, it may not be long before MAMA catches up to its valuation, and heads up further into the high single-digits.
Oracle (ORCL)
After looking at some mid, small, and micro-cap growth stocks to hold, let’s look at Oracle (NYSE:ORCL), one of the largest, most widely-followed stocks that fits well into this category. Yes, this enterprise software and cloud infrastructure provider has not been the biggest beneficiary of the generative AI growth trend.
However, unlike the “Mag 7” components that have really soared because of “AI mania,” as I recently discussed, it’s possible that Oracle stock has much more room to run, thanks to this long-term growth trend. Partnerships with major tech firms bode well for Oracle’s distributed cloud unit. This leaves the company well-positioned to report steady earnings growth in the years ahead.
That’s not all. As Oracle continues to become primarily a cloud computing company, investors may decide that ORCL is worthy of a much higher valuation. Even a small amount of multiple expansion could provide a further boost to long-term price appreciation. To top things off, Oracle has solid dividend growth prospects. While yielding just 1.14% today, ORCL has increased its quarterly payout nine years in a row, with the most recent increase, from 32 to 40 cents per share, implemented last year.
Qualcomm (QCOM)
Similar to Oracle, Qualcomm (NASDAQ:QCOM) is a large tech firm that only recently has started to appreciate significantly from the Gen AI growth trend. So far this year, shares in the semiconductor company have rallied by more than 43%.
After such a strong run over the past six months, Qualcomm stock may be in for more gains in the coming months, and years, ahead. It all has to do with Qualcomm’s pivot, from being primarily a provider of mobile chips, to a newfound focus on capitalizing on the soaring demand for AI-compatible chips for use in PCs. As Barron’s reported last month, major PC makers are all rolling out devices featuring the company’s Snapdragon AI-PC chips.
Starting in the coming fiscal year ending September 2025, this catalyst could unleash a new era of elevated growth for Qualcomm. Per the high end of forecasts for the fiscal year ending September 2026, QCOM’s annual earnings could reach levels nearing $20 per share. Not too shabby, given you can buy Qualcomm today for around $207 per share, and such a high level of earnings growth would undoubtedly send this stock to substantially higher prices.
On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.