If you're looking for a good growth stock to own, you don't have to target a company that's small and in its early growth stages. There is no shortage of larger businesses that generate strong, consistent growth. And the advantage of going with a larger company is that it's often a safer buy given that it will have more of a track record behind it and potentially stronger financials.
Two examples of massive companies that are worth more than $100 billion and that have still managed to double their sales over the past five years are Bristol Myers Squibb (BMY 0.16%) and Amazon (AMZN +0.55%). Given their track records, investors should continue to expect more growth from these businesses in the long run.
1. Bristol Myers Squibb
Pharmaceutical giant Bristol Myers Squibb has a market cap of more than $160 billion and a portfolio of blockbuster drugs that generate more than $1 billion in annual revenue. Two of its top products are cancer medicine Opdivo and blood clot treatment Eliquis, each of which has generated more than $2 billion in sales already in the third quarter alone.
NYSE: BMY
Key Data Points
Bristol Myers also has a strong pipeline of potential treatments for more than 35 diseases. One of the ways the company has been able to expand and grow its resources is through acquisitions. In 2019, Bristol Myers made a big move to acquire cancer and immunology company Celgene for $74 billion, which added blockbuster cancer drug Revlimid into Bristol Myer's portfolio. A year later, it purchased cardiovascular drugmaker MyoKardia for $13.1 billion.
Through both acquisitions and organic growth, Bristol Myers has been able to double its top line within a span of five years.
BMY Revenue (Quarterly) data by YCharts
While I wouldn't expect Bristol Myers to continue making deals of this size in the future, acquisitions are likely going to remain a key part of the company's strategy. Earlier this year, it made a more modestly-sized deal in acquiring Turning Point Therapeutics for $4.1 billion. The company, which also makes drugs to treat cancer, will help bolster Bristol Myers' pipeline.
At a forward price-to-earnings (P/E) multiple of only 10 (the S&P 500 average is 18), Bristol Myers provides good value for growth investors looking for a safe stock to buy and hold for years.
2. Amazon
Tech giant Amazon is another business that's no stranger to acquisitions. And it's not afraid to expand into other industries for the sake of pursuing growth opportunities, as is clear through its $13.7 billion acquisition of grocery chain Whole Foods in 2017. The online retailer has also been eyeing healthcare. In 2018, it bought PillPack for $753 million, and this year, it announced plans to purchase primary care company 1Life Healthcare (also known as One Medical) for $3.9 billion.
Online retail still remains Amazon's bread and butter, but by diversifying into other industries, the company won't run out of growth opportunities anytime soon.
NASDAQ: AMZN
Key Data Points
Amazon has run into some challenges of late simply because of expanding too quickly during the pandemic. As a result, it has had to lay off staff and will continue to do so next year in order to cut costs and adjust to a softening economy. However, this is likely to be a temporary problem for the business in the big picture.
AMZN Revenue (Quarterly) data by YCharts
Amazon is a massive business that continues to find ways to get even larger and more diverse over the years. Although it's facing some hurdles today, in the long run, it's an unstoppable stock and should make for a terrific investment to buy and hold.
Its forward P/E of 46 is high and may be concerning to investors, but that type of multiple for a fast-growing tech company like Amazon isn't uncommon. As its cost-cutting efforts improve its bottom line, its earnings multiple will also come down. As long as you're willing to hang on and buy and hold, this is another stock that can prove to be an excellent buy, years down the road.
