We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where The Goldman Sachs Group, Inc. (NYSE:GS) stands against the other high growth mega cap stocks.
Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.
What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.
These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.
To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.
A close-up of a financial advisor giving advice to a customer, demonstrating the importance of consumer and wealth management.
The Goldman Sachs Group, Inc. (NYSE:GS) operates as a financial institution and offers various financial services to individuals, financial institutions, corporations, and governments. It operates in Asset & Wealth Management, Global Banking & Markets, and Platform Solutions segments. The company has grown its revenue by 20.29% over the last 5 years.
A 61% performance in the last year means people are asking if the stock has already run up too much. There are reasons to believe that new all-time highs will be registered in 2025 and beyond, making the stock an attractive buy. The bank is expected to grow its earnings by 18% this year and 13% next year. This growth prospect makes it an attractive proposition compared to other banking stocks even at all-time highs.
The main drivers of the bank’s earnings are its Global Banking segment and the Asset Management segment. Both these segments are going strong and expected to stay strong going forward, with the Asset Management part of the business not only bringing stability but also growth over the next few years. Higher interest rates could spell trouble for the company though so even though The Goldman Sachs Group, Inc. (NYSE:GS) is an attractive investment for the next 5 years, investors will need to keep a close eye on the Fed’s interest rate policy while they hold the stock.
Overall GS ranks 7th on our list of the high growth mega cap stocks you can buy and hold for the next 5 years. While we acknowledge the potential of GS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as GS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
