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Finding stocks that can double your money in a period of only five years may sound like a tall order. However, it’s quite a reasonable goal, and achievable if you play your cards right (and have some luck). The stock market usually returns 7-8% per year. So, those seeking outsized gains in any five year period will typically have to make extremely risky bets. It takes on average around a decade to double your money in index funds, as a general rule of thumb.
That said, you can be a bit more aggressive and have a much lower chance of losing your money if you want to double your investment in five years. This can be achieved by investing in well-established businesses with solid growth prospects. You need an annual growth rate of approximately 14.86% to double any amount over five years. The Nasdaq has done better than that over the past five years, so we’re certainly in the right part of the cycle to see such gains in individual stocks!
Here are seven stocks stocks I think have the potential to double your money (or more) in five years’ time.
Dollar General (DG)
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The macro environment may be challenging for some folks right now with less money to spend on non-essentials. However, I believe this won’t deter Dollar General (NYSE:DG) to grow over the long-run. I’ve been very bullish on this stock following its recent sharp decline. That’s because, like most well-established retail companies have done time and time again, I think Dollar General will make a full recovery in the coming years.
The company’s latest results highlight the resilience of Dollar General’s core business. Same-store sales grew 0.7% just from getting more customers, even with prices rising. This shows that when cash is tight, people still count on Dollar General to help their dollars stretch further.
The company’s growth plans for 2024 and beyond give me hope that Dollar General can continue gaining more share of the market. With over 2,000 new projects, including 800 stores in new areas, Dollar General is aggressively expanding its footprint to reach more communities. The discount retailer hopes to open 30 new “pOpshelf” stores. Indeed, I think this is a concept that could unlock a new channel for consumers to buy items beyond just essentials.
Importantly, Dollar General’s earnings per share are expected to recover nicely over the coming years.
For people with a long-term view, I think this reliable retailer is worth buying right now. If times get tough, this is a stock that has the potential to reward patient investors well over the next five years.
Snapchat (SNAP)
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You can’t ignore Snap’s (NYSE:SNAP) potential for long-term growth. This Gen-Z app is the next thing that I think will pop when TikTok gets banned. Governments worldwide are laser-focused on getting rid of TikTok, so I think it is only a matter of time until that happens.
But even without that catalyst, this is a company that’s performing very well. Snap’s Q1 revenue increased 21% year-over-year, and the company saw an 85% surge in the number of small and medium-sized clients using Snapchat ads versus last year. That’s a huge jump! I think we could see a lot of excitement as this company’s growth trend re-ignites.
Snapchat also continues expanding its huge worldwide base of daily visitors, which is now over 422 million people. That’s an impressive 10% increase from 12 months ago. Especially noteworthy is that 75% of 13-34-year-olds in more than 25 nations use Snapchat, and that age group represents over half of the total advertising market. Having such a large percentage of that valuable demographic on your platform is incredibly beneficial for advertisers trying to reach younger audiences.
Now, SNAP stock is very depressed compared to its social media peers. However, that also means it wouldn’t surprise me at all if Snap’s stock value doubles within the next five years as its revenue approaches an estimated $10 billion.
Opera (OPRA)
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Opera (NASDAQ:OPRA) is another Gen-Z stock with very good long-term trends. As I’ve discussed in my previous articles, this company has hit a goldmine with its Opera GX launch. Consumers typically don’t budge when it comes to browsers. Chrome, Safari, and Firefox have continued to dominate, and even Firefox has seen its market share go down over the years. Opera is an old player that has never managed to steal any significant market share, but that has been changing due to its Opera GX gaming browser. This browser provides features like ram limits and network throttling. The latter is very useful when gaming, because it can stop background streaming services on a browser from hogging up bandwidth.
The company’s total revenue reached $102 million, rising 17% year-over-year. More importantly, the company achieved an adjusted profit margin of 24% on those sales, resulting in $25 million in EBITDA. For investors seeking income, OPRA stock also provides a healthy 3% dividend yield.
Average annual revenue per user (ARPU) jumped 24% to $1.34. Search advertising through the company’s partnership with Google (NASDAQ:GOOG, NASDAQ:GOOGL), was up 14%, and other online ads surged 21%, indicate that focusing on high-quality users is paying off.
Two recent changes could really turbocharge Opera’s growth in the years ahead. First, the company’s ongoing innovations to its browser experience make it very appealing. Secondly, new rules in the European Union aim to loosen the grip companies like Apple (NASDAQ:AAPL) have by requiring alternative options to be offered. Indeed, after those rules took effect, Opera clearly benefited with a 63% spike in new iOS users in the EU in Q1. While still small today, Opera’s runway for growth looks substantial.
Baidu (BIDU)
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Chinese stocks are trading at dirt-cheap prices, and I think you should pounce on the opportunity as many have started to make a turnaround. Baidu (NASDAQ:BIDU) is arguably the best Chinese tech stock. While the company’s revenue growth seems slow, Baidu’s cloud computing division is starting to pick up steam. It is one of the only big companies Chinese customers can turn to for cloud and AI services.
But by far, Baidu’s biggest bet is ERNIE. Rolling this platform out across all of Baidu could be a real game-changer, but it will take time to implement everywhere. In the short run, the mobile phone business may still have some challenges until the AI becomes fully integrated in a few years.
On the bright side, ERNIE AI is growing fast based on the released API call numbers we have. If the company can continue expanding its application set, improved model performance could open up big monetization opportunities down the road.
While the AI transition plays out, holding the line on costs seems to be paying off based on the non-GAAP operating margin Baidu has reported. If Baidu sustains this momentum with AI tailwinds, I think it is a solid candidate to be a stock that can double your money.
Liberty Broadband Corporation (LBRDA)
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Liberty Broadband’s (NASDAQ:LBRDA) Q1 results were a mixed bag. The company’s earnings per share of $1.69 missed analysts’ forecasts by 27 cents, and revenue of $245 million was slightly below expectations. However, I remain optimistic about the company’s long-term prospects.
Charter Communications (NASDAQ:CHTR), in which Liberty Broadband owns a significant stake, continues navigating current industry challenges. Even with a loss of 72,000 customers, possibly due to increased competition and changes to a federal program, Charter still achieved solid 2.8% growth in EBITDA through smart cost control. Another bright spot is their mobile business, where Charter passed 8 million customer lines and service revenue accelerated 38% year-over-year.
Liberty Broadband itself ended Q1 with $108 million in cash and equivalents. While the company is currently under the 26% Charter ownership cap, share repurchases should resume this summer. Near-term, debt reduction may take precedence over buybacks.
All told, I believe Liberty Broadband’s stake in Charter positions it well for the long haul. Analysts seem bullish on this stock, too.
W.P. Carey (WPC)
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W.P. Carey (NYSE:WPC) seems to be excelling in all aspects of their business currently, and there appears to be potential for significant future growth. However, the most attractive thing with this company is its impressive 5.76% dividend yield that should complement stock gains very well going forward. In my view, WPC stock is definitely a top option for investors looking to double their money over the next five years.
In Q1, W.P. Carey completed $375 million worth of investments, mostly in industrial properties. Importantly, 70% of these deals were located in Europe, where the company has a cost advantage for taking out loans. Their projections to make over $700 million in additional deals in short order is a very encouraging sign for investors worried about the ability of this company to continue to grow.
I’m especially impressed with the initial returns W.P. Carey is projected to earn. The company’s management team expects an average 7.4% rate of cash flow to the initial investment amount. Additionally, expected returns are estimated to be 9% overall per investment, once you also factor in regular rental income increases. This seems to be a conservative forecast, even considering today’s high inflation, since it only bakes in 2% for rising costs when prices have been climbing much faster.
W.P.Carey’s business model stands out in its sector. It has lease agreements on 99.6% of its properties, including guaranteed minimum annual rent hikes of at least 3%. With close to $1 billion available in cash reserves and unused credit lines, this company appears well-equipped to pursue new deals proactively without struggling for funding the way some competitors face challenges.
Albemarle (ALB)
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This is by far the riskiest bet on this list. I rarely cover lithium stocks and companies that have big exposure to volatile commodities. However, lithium has found very strong support recently, and has actually moved up a little this year. So, I think buying up Albemarle (NYSE:ALB) makes sense before EV sales pick up steam in the coming quarters after interest rate cuts materialize.
Albermarle’s revenue declined 47% year-over-year to $1.36 billion, slightly missing estimates. However, adjusted earnings per share of 26 cents beat expectations by $0.03.
Management has already achieved over $90 million in cost savings this quarter, and is on track to deliver more than $280 million in savings for the entire year. At the same time, Albemarle’s lithium volumes are expanding as key projects like Kemerton I and Meishan ramp up. Analysts expect a big rebound next year. If that materializes, the stock could recover substantially. This makes me believe it is one of the stocks that can double your money over the next five years.
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Communications, Consumer Discretionary, Consumer Staples, Retail, E-Commerce, Energy, Renewable Energy, Battery, Lithium, Real Estate, Media, Social Media, Technology
