Three Stocks Poised for Growth and Potential Wealth in 2024

Three Stocks Poised for Growth and Potential Wealth in 2024

A difficult part of long-term investing is simply waiting. Investors may buy cheap stocks in hopes of making outsized long-term gains. This often means facing periods of stagnation or even decline, and sometimes this can take years.

In other cases, profits could come more quickly, as investors have seen with stocks like Nvidia And Super Microwhich have soared since the start of 2024. They may not have run their course in the short term, but three other stocks have a good chance of ending the year higher.

Real estate income

Real estate income (NYSE:O) is a real estate investment trust (REIT) which owns approximately 15,500 single-tenant commercial properties. It leases space to many of the country’s largest retail businesses, often purchasing their property and leasing it back to the previous owner.

Additionally, the agreements are net leases. This means that the tenant covers maintenance costs, taxes and insurance.

Despite this advantage, the stock appears to have suffered as higher interest rates increase borrowing costs and, by extension, the cost of new deals.

Still, its monthly payout, which pays investors nearly $3.08 per share per year, offers a dividend yield of 5.7%. Since the payout has increased at least once a year since 1994, dividend increases will likely continue.

Additionally, Realty Income could see some relief on the interest rate front. After massive increases in recent years, the Fed estimates it will enact three interest rate cuts this year. This should reduce Realty Income’s borrowing costs, which could attract more investors to the stock.

Finally, its price-to-earnings (P/E) ratio of 43 is at the lower end of its historical range, given that the earnings multiple has exceeded 50 for most of the past five years. With this attractive entry point, investors should consider Realty Income as a growth and income stock that is expected to generate higher returns in 2024 and beyond.

Innovative industrial properties

Another REIT on the rebound is Innovative industrial properties (NYSE:IIPR) (PII). IIP leases land and facilities to cannabis producers. At the end of 2023, it owned 108 properties, or 8.9 million leasable square feet, in 19 U.S. states.

Like Realty Income, it buys a property and rents it back to the previous owner. Since marijuana companies are not allowed to use the banking system, this gives them an immediate source of liquidity while also giving IIP a source of revenue.

The IIP has also shown that it can deal with adversity. The latest downturn in the cannabis industry has led to an increase in unpaid renters. However, it was able to change course, renegotiating the terms of some leases, finding new tenants or selling properties when it was unable to find an alternative solution.

It confirmed this strength at the end of last year by announcing its first increase in payments in five quarters. At $7.28 per share per year, its dividend yields 7%.

Additionally, IIP’s stock has steadily risen since hitting its lowest level last April, and its P/E ratio of 18 is near its all-time low. As cannabis sales improve and interest rates fall, upward trends appear to be setting up to push IIP higher, now and in the future.

IBM

Another solid income stock is IBM (NYSE:IBM). The company and its shares had been stagnant for years as its technology businesses struggled to grow amid increasing competition.

However, the paradigm shifted when IBM purchased Red Hat in 2019. The architect of that purchase, Arvind Krishna, became CEO shortly after. It then acquired dozens of cloud-based companies and split the managed infrastructure segment into Kindergarten.

Today, IBM is the sixth largest cloud infrastructure provider in the world. Although not the largest share of the market, the cloud computing sector is expected to grow at a compound annual growth rate of 14% through 2030, according to Grand View Research. Additionally, its generative AI platform, Watsonx, allows the company to support artificial intelligence-based applications for its customers, making growth in its cloud business likely.

Additionally, with its annual dividend of $6.64 per share, IBM is one of the most profitable cloud stocks, with a dividend yield of 3.5%. If it chooses to increase the dividend in April as it has in previous years, it would mark the 29th consecutive year it has increased the dividend.

More and more investors have noticed IBM’s value proposition. The stock is up nearly 50% over the past 12 months, taking it to an all-time high. Although its P/E ratio of 24 is high by IBM standards, it compares well to other cloud and AI stocks, increasing the chances that the shares will reach new record highs in 2024 and beyond .

Should you invest $1,000 in real estate income right now?

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Will Healy holds positions in Innovative Industrial Properties. The Motley Fool holds positions and recommends Innovative Industrial Properties, Nvidia and Realty Income. The Motley Fool recommends International Business Machines. The Motley Fool has a disclosure policy.

3 stocks that could make you richer in 2024 was originally published by The Motley Fool

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