You would have heard this before: “If you start investing for retirement through your first full-time job, your investments grow gradually.” But such advice is still not pretty definite – for instance, let’s say you have Dh10,000 to invest – where would you invest to get the most gains?
“Dh10,000 can give a helpful jolt to your portfolio, whether you started investing last week or you’re close to retirement,” said Brody Dunn, an investment manager at a UAE-based asset advisory firm. “There is an abundance of profitable stocks you can invest in today, depending on your goals.”
Money managers are seeing pockets of opportunity with stock investments. For those who want to want to know the top five company stocks worth putting your hard-earned money in right now, market analysts reveal ones that can serve as good investments, which we will elaborate further below.
However, before getting into the list of companies worth investing in, take a look at the sectors (industry categories) that are thriving currently with the latest developments in sciences and technology:
2. Renewable Energy: Companies focusing on solar, wind, and energy storage are likely to benefit from the global shift towards sustainable energy.
3. Consumer Goods: Established brands with strong e-commerce capabilities can thrive as online shopping continues to grow.
4. Electric Vehicles (EV): With the shift toward electric mobility, companies in the EV space, including manufacturers and battery suppliers, are worth watching.
5. Financial Technology (Fintech): Companies that streamline financial services through technology are expanding rapidly, especially in emerging markets.
Best stocks to buy
While buying any stock is easy, buying the right stock without a time-tested strategy and often turns out to be incredibly hard for most newbie and even veteran investors. So what are the best stocks to buy now or put on a watch list?
“It may become difficult for investors to find reliable growth stocks to buy if elevated interest rates have a lagging negative impact on world economies, particularly the US, which house most of the big stocks listed below,” said Mohammed Shaan, another UAE-based wealth advisor.
“Optimism around artificial intelligence has helped lift the S&P 500 in 2024, boosting key chip stocks and power plays in the utilities space. Investors seeking sustainable returns will need to look for companies with solid long-term growth potential.”
Here’s a compilation of companies investments and their respective growth potential or how much they are undervalued by, both Dunn and Shaan agree are worth betting on for near-term growth, in no particular order of hierarchy.
1. Advanced Micro Devices Inc. (AMD)
Growth potential: 15 per cent (i.e. for Dh10,000, gains start at Dh1,500, varying per share price)
Shares of US-based microprocessor stock Advanced Micro Devices are up a whopping 5,820 per cent over the past decade. AMD reported 8 per cent revenue growth and an impressive 881 per cent profit growth in the second quarter, and further positioned to benefit from the current AI boom.
Even after AMD's big run, analysts says its shares remain undervalued thanks to its improving balance sheet and its data center server sales growth outlook, while projecting 27 per cent revenue growth in 2025 and says a better sales mix from new product launches will help margins expand through 2025.
2. Exxon Mobil Corp. (XOM)
Growth potential: 15 per cent (i.e. for Dh10,000, gains start at Dh1,500, varying per share price)
Exxon Mobil is the largest US oil major. Oil majors aren't traditionally considered high-growth stocks, but favorable energy market conditions in recent years have made oil stocks some of the highest-growth companies in the market.
Exxon saw 12 per cent revenue growth in the second quarter, and analysts eye future growth fueled by the development of the company's properties following Exxon's acquisition of Pioneer Natural Resources. In the long term, Exxon's clean energy transition could be an additional growth source.
3. Estee Lauder
Growth potential: 20 per cent (i.e. for Dh10,000, gains start at Dh2,000, varying per share price)
With brands that include its namesake, Clinique, and Aveda, premium beauty products provider Estee Lauder has a strong presence across both brick-and-mortar and digital channels. This is why analysts expect the company to benefit from a consumer shift toward higher-end beauty brands.
Additionally, Estée Lauder stock looks undervalued at its levels of around $90 (Dh330) after it flagged struggles with falling sales and profits lately, forcing market investors to price in the stock’s issue to the stock’s current value.
4. Alphabet
Growth potential: 30 per cent (i.e. for Dh10,000, gains start at Dh3,000, varying per share price)
One of the world's largest online search and advertising companies and the parent company of Google and YouTube, Alphabet reported 14 per cent revenue growth in the second quarter, which included 28 per cent Google Cloud revenue growth.
Analysts project Alphabet can sustain greater than 10 per cent annual revenue growth through at least 2025, adding that growth will be supported in large part by integration of AI features throughout its advertising business, projecting Google Cloud revenue growth of at least 25 per cent annually.
5. Yum China
Growth potential: 40 per cent (i.e. for Dh10,000, gains start at Dh4,000, varying per share price)
Fortune 500 fast-food restaurant operator based in Shanghai, Yum China, is 40 per cent undervalued relative to analyst’ fair value estimate of $76 (Dh280) per share, after challenges within the restaurant sector was priced in on account of the real estate market slowdown the country has been facing.
Analysts say Yum China has opportunities for restaurant expansion in the fast-food industry over the longer term after China’s massive cash injection measures in recent weeks and gain a wider share in the $700 billion (Dh2,571 trillion) domestic restaurant market.
Bottom line?
Determining how to invest Dh10,000 comes down to your goals and how much risk you are willing to take on. However, all of the underlying factors that drive these stocks make them cost-effective means to grow your savings.
“Provided you choose the right stock for your time-specific financial goal, you can find a lot of success even by investing Dh10,000, or even lesser. So take a leap, invest your money, and put it to work for you,” added Shaan.
“However, regardless of the above suggestions, remember to conduct thorough research on your own too, consider market conditions, and consult with a financial advisor before making any investment decisions to better meet your savings related goals.”
