Facebook
Twitter
With the market’s ongoing correction, this is a terrific time for investors to keep things simple. And that means buying shares of the best growth companies in the world at a discount to their price from just a few short months ago.
More specifically, I suggest buying shares of what I call “dominant global technology” companies. These are companies with must-have technologies protected by patents, exceptional R&D departments, deep customer relationships and well-known brands. You know the names of these companies, and in various ways you use some form of their technologies every day (even though you may not know it).
These companies are all likely to grow faster than the broad market, as measured by the S&P 500, over the next two years. Here are two such dominant global technology companies to embrace now:
Growth Stock No. 1: 3M Co. (NYSE:MMM)
You may not think of 3M Co. (NYSE:MMM) as a high growth stock but its year-in year-out performance should make you reconsider. Its 10-year average revenue growth is over 5% and 10-year average net income growth is 6%. There was not a single year of contraction over the last decade on either metric.
I’m sure you have a roll of 3M tape somewhere in your house and a 3M Post-it notepad next to your phone. The company makes thousands of products, from adhesives and films to medical supplies. This company does it all, and it does it very well all around the world.
The backbone of 3M’s business is its research and development department. R&D typically spends the equivalent of 5% to 6% of the company’s total revenues inventing new products, and making improvements to existing ones.
But this business isn’t all about innovation. Conservative management also means reliable profits and cash flow. And management is willing to sell off businesses that aren’t likely to grow in the future. Such discipline means the company is a cash cow, able to return money to shareholders in the form of stock buybacks and dividends (current yield is 2.5%).
3M is a great technology company, and deserves a place in every growth investor’s portfolio.
Growth Stock No. 2: VMware (NYSE:VMW)
VMWare is the undisputed world leader in virtualization infrastructure. The company has transformed how large companies and complex organizations manage their IT. Perhaps most important, VMware is making IT infrastructure more efficient and less complex to manage.
The end effect is that VMware’s clients have more reliable systems at a lower cost, and a trusted partner that maintains their critical systems. This is the source of VMware’s dominance.
The company is working to provide customers with a wider array of services for mobile applications and cloud-based computing. For Main Street investors, the details of these initiatives are less important than the objective, which is to further cement VMware as the infrastructure provider of choice for the foreseeable future.
While there will always be competition from the likes of Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM), I expect VMware will continue to dominate, especially for large and complex organizations. With shares trading at $91, many brokerage houses have recently added shares of VMware to their “conviction buy” list. You should too.
Become a 7-Figure Investor?
It could be easier than you think. Because Ian Wyatt’s allowing a handful of readers exclusive access to the first five stocks he’s buying right now for his own account. Each one carefully selected to build the foundation for his personal 7-figure portfolio. And he’s inviting a small number of Wyatt readers to join him. Click here for complete details.