Looking to get richer in 2024 (not to mention in 2025, 2026, 2027, and beyond)? Of course you are! Investing wisely in the stock market is a solid way to accomplish that goal.
The stock market does experience occasional corrections and even crashes, but in the long run, it tends to go up, up, up. One proven way to successfully invest in stocks is to buy one or more low-fee exchange-traded funds (ETFs) that track a broad market index, such as the S&P 500. Doing so will get you roughly the same return as the index (minus the low fees).
The other proven way to get richer is to research and buy individual stocks. Do it well and you might even generate market-beating returns with some or much of your invested moolah. But which individual stocks can help you get richer in 2024? Here are three to consider:
1. Nvidia
If you've been paying any attention to stocks in recent years, you've likely noticed Nvidia's (NVDA 1.07%) amazing run. Over the past 10 years, its stock has averaged annual gains of around 69%. Over the past five years, it's more like 80% average annual gains. Compare that to the broader market average of 10.5%. Jeepers.
NASDAQ: NVDA
Key Data Points
As the company itself notes, it invented the graphics processing unit (GPU) in 1999 and is now a key player in developing artificial intelligence (AI) chips: "Our work in AI is transforming industries valued at more than $100 trillion, from gaming to healthcare to transportation, and profoundly impacting society."
It would be reasonable to assume that it's too late to invest in Nvidia and to think that the stock is likely overvalued, but that's not necessarily the case. The company's forward-looking price-to-earnings (P/E) ratio sits at around 37, which is below its five-year average of 39. And its recent price/earnings-to-growth (PEG) ratio of 1.5 is below its five-year average of 2.4. Yes, its valuation is still quite high and its growth may well slow soon, but a case can be made that it still has lots of room to run.
2. Salesforce
Salesforce (CRM +0.45%) is less well known than Nvidia, but its stock has also performed very well, advancing more than 11,000% since its debut in 2004. It has a lot of growth potential, too. In its fourth quarter, the company posted revenue of $9.3 billion, up 11% year over year, with full-year operating cash flow for fiscal 2024 up 44%.
Salesforce is one of the biggest enterprise software companies on the planet, with an artificial intelligence platform of its own, called Einstein. Its growth has slowed somewhat, recently, and the company has pivoted a bit toward focusing more on cost-cutting and on rewarding shareholders via stock buybacks.
NYSE: CRM
Key Data Points
Saleforce's stock doesn't appear exactly cheap, but its valuation isn't in nosebleed territory, either. Its forward P/E was recently 31, below its five-year average of 42 -- though its PEG ratio of 3.0 was above the five-year average of 2.2. In short, as long as you plan to hang on for many years -- and as long as you believe that AI and cloud computing have rosy futures -- you're likely to grow wealthier with Salesforce.
3. Realty Income
Then there's Realty Income (O 1.42%), with a cool ticker symbol and a slower growth rate. There's a lot to like about Realty Income, though -- starting with its dividend, which recently yielded a hefty 5.8%. The company is organized as a real estate investment trust (REIT), which means it owns lots of real estate properties and leases them out. Being a REIT also means that it's required to pay out at least 90% of its taxable earnings to shareholders. Realty Income is a little different from other dividend payers because its payouts arrive monthly, not quarterly -- and it has been making (and regularly raising) these payments for 646 consecutive months (that's almost 54 years).
NYSE: O
Key Data Points
REITs often focus on particular niches of the real estate market, such as medical facilities, warehouses, data centers, shopping malls, offices, and so on. Realty Income notes that "The majority of our properties are leased to retail and industrial clients that have a service, non-discretionary and/or low-price-point component to their business." It names some names, too: "We are proud to partner with industry leaders around the globe like Treasury Wine Estates, Sainsbury's, 7-Eleven, Lowe's and Chipotle." The company recently boasted more than 15,000 commercial properties under long-term leases, with 98.6% occupancy. It's diversified, too, across more than 1,300 different clients and 86 different industries.
Realty Income's stock is appealingly valued at recent levels, with its recent price-to-funds from operations (FFO) ratio of 13 well below its high of 17 in 2022. It's likely to get a boost when interest rates start falling, as they're generally expected to do over the coming year.
Whatever you invest in, don't stop investing
These are just three of many intriguing and promising companies out there. And always remember -- if you don't have the time, skills, or interest in studying and choosing individual stocks in which to invest, just stick with a simple (but wonderful) index fund. It can be all you need to help fund a comfortable retirement.
