You can't generate market-beating returns without taking on risk. That's a given. Generally speaking, the more risk you take the greater the potential returns will be. That's why so many investors are attracted to growth stocks with relatively high levels of risk.
However, there are stocks that offer strong growth potential yet aren't super-risky. Here are three of the safest growth stocks on the planet.
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1. Alphabet
Even with a market cap of close to $1.9 trillion, Alphabet (GOOG 1.43%) (GOOGL 1.42%) remains a top growth stock. The tech giant reported 32% year-over-year revenue growth in the fourth quarter of 2021.
Alphabet's momentum should continue. The company's core search businesses still have room to grow. Its Google cloud unit is growing faster than the cloud market leader, Amazon Web Services. Alphabet also has plenty of other growth drivers, including its Waymo self-driving car technology business.
Most importantly, Alphabet has an exceptionally strong moat. No rival is anywhere close to knocking Google, YouTube, and the company's other apps off their perches. And advertising on these platforms generates more than 80% of Alphabet's total revenue. In addition, Alphabet has a cash stockpile of nearly $140 billion it can use to fortify its moat.
An upcoming 20-for-1 stock split could provide a near-term catalyst for Alphabet's share price. However, the real reason to like this stock is the strength of its underlying business.
2. Brookfield Renewable
My Motley Fool colleague Matt DiLallo recently wrote that Brookfield Renewable (BEP 1.40%) (BEPC 2.46%) stands out as an energy stock that's "as safe as they come." I think that Matt is 100% correct.
Brookfield Renewable is a global leader in renewable energy. The company operates hydroelectric, wind, power, and storage facilities in North America, South America, Europe, and Asia that combined have 21 gigawatts of capacity.
The stock is a safe bet because of the rising demand for renewable energy. We're still in the early stages of a transition that will go on for years. More than $150 trillion could be invested in decarbonization efforts through the next three decades.
Brookfield Renewable is poised to be a big winner as a result. Its development pipeline could nearly quadruple the current capacity. The company expects to generate average annual total returns of between 12% and 15%. This is a safe stock that could realistically double within the next five or six years.
3. Intuitive Surgical
Intuitive Surgical (ISRG 0.71%) pioneered the robotic surgical systems market more than 20 years ago. I think it's one of the safest growth stocks on the planet for three main reasons.
First, Intuitive still commands a market share of close to 80% even with new rivals on the scene. The company's long track record of success and continued investment in research and development give it compelling competitive advantages.
Second, Intuitive's razor-and-blades business model provides an impressive level of recurring revenue. Last year, 75% of the company's total revenue stemmed from recurring sources, including replacement instruments and accessories. The more procedures that are performed using its systems, the more Intuitive's recurring revenue will increase.
Third, even with Intuitive's remarkable growth, the robotic surgical systems market has a lot of room to expand. Intuitive estimates that there are 20 million soft tissue procedures performed each year that could be improved with robotic assistance. By comparison, less than 2 million procedures are expected to be performed in 2022 with Intuitive's systems.
