3 Top Growth Stocks to Buy and Hold for 2024 (2024)

The long-term outlooks for these high-quality companies are solid—and their stocks are cheap.

Susan Dziubinski: Hi. I’m Susan Dziubinski with Morningstar. Growth stocks had a big 2023. How big? The Morningstar US Growth Index outperformed the Morningstar US Market Index by 12 full percentage points last year.

Whether growth stocks can continue to dominate in 2024 is anyone’s guess. But Morningstar expects economic growth to slow during the next few quarters. As a result, we think investors looking to buy growth stocks today would do well to focus on companies that should be able to maintain margins in a slower growth environment. And then investors should only buy the stocks of those companies below what they’re worth as a way to limit price risk in the face of economic uncertainty.

So today, we’re looking at three cheap growth stocks to buy taken from Morningstar’s Best Companies to Own list. Our Best Companies to Own list includes companies with significant competitive advantages—or what we call wide economic moats. These companies also have predictable cash flows and are well positioned to confront an economic slowdown. The stocks we’re focusing on today from that list are undervalued and land on the growth side of the Morningstar Style Box.

1. Rentokil Initial RTO
2. AstraZeneca AZN
3. Tyler Technologies TYL

The first stock on our list of three top growth stocks to buy and hold for 2024 is Rentokil Initial. Rentokil is the world’s largest commercial pest-control business, holding leading market shares in most of the countries in which it operates. We expect global trends of increasing urbanization and growing economic prosperity to drive increased per capita spending on Rentokil’s pest-control and other services, leading to solid organic revenue growth for the company over the coming decade. We think the stock is worth $36 and shares trade well below that.

The second name on our list of top growth stocks to buy and hold in 2024 is AstraZeneca. Morningstar thinks this drugmaker maintains one of the strongest pipelines in the drug group, and the company has several key products in development that hold blockbuster potential. And as high-margin specialty drugs represent a larger proportion of sales over time, profit margins should expand over the next five years. We think AstraZeneca stock is worth $78 per share.

The final top growth stock to buy and hold in 2024 is Tyler Technologies. Morningstar sees Tyler as the leader in the niche market of government operational software. As demand for software as a service increases and the need for local governments to modernize their legacy systems intensifies, Tyler is looking at a solid runway of growth for the next decade. Plus as Tyler increases its portfolio of products and services, we expect it to strike larger deals that include more solutions. We think Tyler Technologies stock is worth $475 per share.

For more stock ideas, be sure to subscribe to Morningstar’s channel and visit Morningstar.com.

Morningstar director Damien Conover and senior analysts Dan Romanoff and Grant Slade provided the research behind this report.

Watch “3 Top Blue-Chip Stocks to Buy for 2024″ for more from Susan Dziubinski.