The Nasdaq 100 has steadily outperformed the S&P 500. The Nasdaq has more than doubled over the past five years while the S&P 500 is only up by 78% during the same stretch. There is overlap between the stocks in both indices, but the Nasdaq 100 has been the clear winner.
Top-performing index funds and ETFs can offer clues for future opportunities. Diving into these funds and discovering which stocks drove the gains can help investors beat the market. If you’re looking for stocks to buy on the Nasdaq, you may want to consider these three picks.
Cintas (CTAS)
Cintas (NASDAQ:CTAS) offers business safety equipment and supplies to more than one million companies. That’s been a winning formula so far, but that’s only 6.25% of North American businesses. Cintas still has more room to expand and demonstrated that it’s still growing.
The company grew its revenue by 9.9% year-over-year in the third quarter of fiscal 2024. Net income jumped by 22.0% year-over-year. Profit margins are expanding and currently sit in the mid-double-digits. Cintas also hiked its dividend by 17.1% in 2024.
The yield is low at 0.81%, but dividend growth investors can easily overlook that. The stock has gained 47% over the past year and has soared by 222% over the past five years. Shares currently trade at a 42-forward P/E ratio.
Cintas is currently rated as a “Moderate Buy” among 12 analysts. The highest price target of $790 per share suggests the stock can rally by an additional 19%.
Intuit (INTU)
Intuit (NASDAQ:INTU) offers financial software products like Quickbooks and Turbotax. The company has been outperforming the Nasdaq and is up by 148% over the past five years. The stock has a 0.58% dividend yield but has achieved a compounded annual growth rate of 16.65% over the past 10 years.
The company has raised its dividend for 11 consecutive quarters, and a 34.62% dividend payout ratio gives the company plenty of space for further hikes. Intuit’s financials are also pretty good. Revenue increased by 11% year-over-year in the second quarter of fiscal 2024. The company also grew its net income by 110% year-over-year.
Intuit’s largest segment is also growing at the fastest rate. The company’s Small Business and Self-Employed Group Revenue grew by 18% year-over-year. Intuit recently repurchased $536 million of shares to reward long-term shareholders. The fintech firm has an additional $2.7 billion that has been authorized for stock buybacks.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) combines high profits with rising revenue. The company reported 25% year-over-year revenue growth in Q4 2023 while more than tripling its net income year-over-year. Investments in artificial intelligence and a focus on the bottom line have helped the company tremendously.
The company’s social networks also exhibited growth acceleration. The number of daily active people across all of the company’s social networks grew by 8% year-over-year. The company is also sitting on $65.40 billion in cash, which prompted its first-ever dividend. Meta Platforms has a low dividend yield, but the company’s dividend growth rate should be exceptional for several years. It’s reasonable to anticipate the dividend increasing by at least 10% per year for more than a decade.
Meta Platforms isn’t only committed to its dividend. The company initiated $20.03 billion worth of stock buybacks in full-year 2023. Meta Platforms reached that milestone by repurchasing $6.32 billion worth of shares in the fourth quarter. The social media giant is rewarding long-term investors with dividends and buybacks while delivering financial growth.
On the date of publication, Marc Guberti did not have (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.