Successful investing requires digging into a company's financials and assessing its prospects. This process may sound tedious, but it allows you to have a better sense of which growth stocks can do well over the long term. As research takes time and effort, it's good to shortlist a bunch of stocks that you feel comfortable buying for long-term capital appreciation. These stocks should ideally have a solid growth track record, a dominant market share, and possess catalysts that can ensure their steady and continuous growth.
As you gain more knowledge about businesses, you will end up with a pool of solid stock ideas to consider. The next step is to select your best ideas to buy first as these will be your most compelling buys. When push comes to shove, here are three stocks that I will pick above the rest for their promising prospects and strong business fundamentals.
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Hawkins
Hawkins (HWKN -1.58%) is a specialty chemicals and ingredients company that manufactures products for the industrial, water treatment, and health and nutrition sectors. The company has not only demonstrated steady growth in revenue and net income over the years, but has also paid out a dividend for 39 consecutive years.
Hawkins saw sales rise from $774.5 million in fiscal 2022 (ending March 31) to $919.2 million in fiscal 2024. Net income climbed 46% over this period from $51.5 million to $75.4 million. The most impressive was the company's free-cash-flow generation, which leapt more than eightfold from $14.3 million in fiscal 2022 to $119.3 million in fiscal 2024.
Hawkins' strong performance has carried on in the first quarter of fiscal 2025. Sales inched up almost 2% year over year to $255.9 million but operating income managed to jump 22.5% year over year to $39.8 million. Net income improved by 23.3% year over year to $28.9 million, and the business also churned out a positive free cash flow of $6.9 million, continuing its track record of free-cash-flow generation. In tandem with its good results, management upped the company's quarterly cash dividend from $0.16 to $0.18.
Investors can also look forward to acquisitive growth to drive earnings to the next level. Hawkins demonstrated a solid track record of accretive acquisitions with an average of two per calendar year since 2020. In June and July of this year, the company completed two acquisitions -- that of Wofford Water Service and Intercoastal Trading, both for its water treatment division.
Wofford will help Hawkins to build up a larger customer base in Mississippi while Intercoastal helps the business to expand into the East Coast region. Over in the industrial and health and nutrition segments, Hawkins will focus on new product development, with an eye to growing its specialty branded products backed by its research and development.
Garmin
Garmin (GRMN -0.62%) is a technology and engineering company that manufactures products for five key sectors: fitness, outdoor, aviation, marine, and auto OEM. The company is well known for utilizing global positioning satellite (GPS) technology and incorporating it into its various products such as multi-sports watches, smartwatch devices, and golf devices. Garmin saw its revenue increase from $5 billion to $5.2 billion from 2021 to 2023 while its net income went from $1.1 billion to $1.3 billion. The business also generated an average positive free cash flow of $810 million over this period.
Garmin's robust results have continued in the first half of 2024. Sales increased by 17% year over year to $2.9 billion with operating income climbing 33% year over year to $640.4 million. Net income increased by 17.6% year over year to $576.6 million, and the business generated a positive free cash flow of $620.3 million. Garmin paid out a quarterly dividend of $0.75 per share, taking its annualized dividend to $3. The company has been steadily increasing its dividend since paying out $0.40 per quarter back in 2011.
Garmin has raised its full-year revenue guidance and expects revenue to increase by 13.8% year over year to $5.95 billion for 2024, which demonstrates healthy top-line growth for this accessories company. The company continues to release innovative new products for its five divisions along with Garmin Pay, which supports contactless payments. With its broad range of products that endear customers, the business looks set to continue doing well.
Symbotic
Symbotic (SYM -2.98%) is an automation technology company that integrates artificial intelligence (AI) into its platform to solve distribution challenges and supply chain issues. The company helps its clients by deploying solutions to improve their product delivery efficiency and accuracy to help them achieve cost savings and better workflow. Symbotic saw its revenue rise nearly fivefold from $251.9 million in fiscal 2021 (ending Sept. 30) to $1.2 billion in fiscal 2023. Gross profit also shot up sharply from just $10.4 million to $189.7 million over the same period. The business also saw its free cash flow more than double from $97.4 million in fiscal 2021 to $209.5 million in fiscal 2023.
The technology company continued to report strong results for the first nine months of fiscal 2024. Revenue surged 63.6% year over year to $1.3 billion while gross profit increased by nearly 39% year over year to $181.7 million. The business also generated a positive free cash flow of $18.3 million. Symbotic has 39 systems in deployment, which helped revenue hit a record high for the current quarter. Although gross margin was temporarily affected by implementation delays, CFO Carol Hibbard expects margins to revert to historical levels by the fourth quarter of the fiscal year.
There could be more to come for Symbotic. In August, the company forked out $8.7 million to acquire Veo Robotics, which deals with intelligent safeguarding for industrial robots. Veo developed a FreeMove 3D depth-sensing computer vision system that Symbotic plans to integrate into its robotic warehouse automation system to increase productivity in line with enhanced human-machine collaboration. Management sees a large serviceable addressable market for in-house supply chains of $432 billion, which implies significant opportunities are available for Symbotic to expand its reach and continue growing for many more years.
