Businesses with high returns on capital with strong growth can be attractive to long-term investors because these businesses are highly profitable, and can reinvest profits at a high rate of return.
Here are 10 businesses with high returns on capital that are expected to see decent earnings-per-share growth over the next 2 years.
Top 10 High ROIC, High Growth Stocks
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Here are a few of our favorite stocks from this list.
Apple (AAPL)
Key Stats:
- Market Cap: $3.4 trillion
- Industry: Technology
- Analyst Upside: 13%
- P/E Ratio: 30.0
Company Overview: Apple Inc. is a global technology leader known for its consumer electronics, software, and online services. Key products include the iPhone, iPad, Mac, Apple Watch, Apple TV, and services like the App Store, Apple Music, and iCloud.
Business Strategy: Apple earns revenue primarily through sales of hardware products and digital services. The company’s strategic direction emphasizes innovation in its core products, expansion into digital and subscription services, and growing its ecosystem to maintain high customer loyalty and engagement.
Recent Developments:
- Earnings & Profitability: Apple has continued to report strong earnings, driven by robust sales across its product lines, particularly in iPhones and services which have seen significant consumer demand.
- Business Growth Trends: The company is aggressively expanding its services sector, which is becoming a larger part of its revenue mix, showing substantial growth in areas like cloud services, music, and payments.
- Shareholder Returns: Apple has consistently returned value to shareholders through its share repurchase programs and quarterly dividends, reflecting its strong cash flow generation.
Track Apple’s financials, growth trends, and analyst forecasts on TIKR >>>
Adobe (ADBE)
Key Stats:
- Market Cap: $164 billion
- Industry: Software
- Analyst Upside: 35%
- P/E Ratio: 18.4
Company Overview: Adobe Inc. specializes in creative and digital media software and services, known for products like Photoshop, Acrobat, and the Adobe Creative Cloud that cater to creative professionals and marketers.
Business Strategy: Adobe generates revenue from its software products primarily through subscription-based models, focusing on continuous innovation and integration of artificial intelligence to enhance user experience and productivity. The company aims to expand its digital experience offerings to capture more of the cloud-based market.
Recent Developments:
- Earnings & Profitability: Adobe has maintained strong profitability with consistent revenue growth, underscored by high adoption rates of its Creative Cloud and Document Cloud solutions.
- Business Growth Trends: The company has seen significant growth in its digital media segment, with expanding use cases for its creative and document solutions in remote work environments.
- Shareholder Returns: Adobe actively engages in shareholder return policies through share buybacks, though it does not currently offer dividends, opting instead to reinvest in business growth.
Track Adobe’s financials, growth trends, and analyst forecasts on TIKR >>>
TIKR Takeaway
Today, Apple and Adobe are two businesses seeing nice earnings growth with extremely high returns on capital. These are high-quality businesses that may be excellent stocks to own at the right price.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
