CMG

Magnificent Misfits: 3 Non-Tech Stocks to Outshine the FAANG Gang in 2024

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Are you looking for non-tech stocks to buy that will do well and outperform the Magnificent Seven? Despite some of the top tech stocks not doing well in 2024, the Bloomberg Magnificent 7 Total Return Index is up nearly 19% year-to-date (YTD) and 73% over the past year. It’s going to be tough to match that kind of firepower. 

According to Finviz.com, of the 503 stocks in the S&P 500, 79 are outperforming the Magnificent 7 in 2024. Of those, 63 are non-tech stocks. The three featured on this list come from different sectors, but all three were up over the past month, in addition to beating the index in 2024. 

Chipotle Mexican Grill (CMG)

Chipotle - Sign on building, CMG stock

Source: Retail Photographer / Shutterstock.com

Chipotle Mexican Grill (NASDAQ:CMG) represents the consumer discretionary sector. Its shares are up more than 12% over the past month and nearly 33% in 2024, outperforming the Magnificent 7.

The trouble with forecasting about stocks is that you’re humbled a lot. Last November, I suggested that CMG stock was overbought when it was trading around $2,200. I didn’t think it was worth buying until it was below $2,000. But it then went on a 32% run over the next four months. 

The company is so confident of its future that it just announced it wants to do a 50-for-1 stock split. If approved by shareholders, it would be the first stock split for the Mexican fast-casual restaurant.

Chipotle’s argument for dropping its share price to $60 from nearly $3,000 is first and foremost about making the shares more accessible to its employees. But it also become more affordable for other investors as well. That’s a smart move to keep employees engaged and new investors buying. 

“This split comes at a time when our stock is experiencing an all-time high driven by record revenues, profits, and growth,” CBS reported comments from Chipotle’s chief financial and administrative officer, Jack Hartung. 

This time, I’m not betting against Chipotle. Neither should you if you’re looking for non-tech stocks to buy.

Constellation Energy (CEG)

Person holding the glowing world in their hands with icons with different types of energy. AI Recommended Energy Stocks in July

Source: PopTika / Shutterstock

Constellation Energy (NASDAQ:CEG) represents the utilities sector. Its shares are up more than 14% over the past month and 66% in 2024, more than three times the Magnificent 7. 

A funny thing happened on the way to a global surge in artificial intelligence (AI). The power demand went through the roof. Although Elon Musk might be controversial right now, he’s no dummy. He recently stated that power shortages will happen due to this demand. 

“Next year, you will see that they just can’t find enough electricity to run all the chips,” Barron’s reported the billionaire’s comments at the Bosch ConnectedWorld conference in February. 

In 2020, data centers, which play a big part in AI computing, accounted for 2% of U.S. electricity consumption. By 2030, it could account for as much as 7.5%, a nearly four-fold increase. 

Constellation just happens to be one of North America’s cleanest utilities. More than 90% of its annual output is carbon-free. It plans to get to 100% by 2040. Nuclear energy is a big reason for its audacious targets. 

The utility’s nuclear generation capacity is 22.1 gigawatts (GWs), more than 3 times Vistra Energy’s (NYSE:VST) capacity of 6.3 GW. It also has the largest share of the commercial and industrial market at 21%, 500 basis points more than NRG Energy (NYSE:NRG). 

It’s clean, and it’s safe. That’s a recipe for success.  

Trane Technologies (TT)

Back View of the Head of the Project Holds Laptop and Discussing Product Details with Chief Engineer while They Walk Through Modern Factory., FR rents out these spaces in the U.S.

Source: Gorodenkoff / Shutterstock.com

Trane Technologies (NYSE:TT) represents the industrial sector. Its shares are up nearly 5% over the past month and 23% in 2024.

Trane’s business is driven by three brands: Trane for commercial HVAC (heating, ventilation and air conditioning), Thermo King for transport refrigeration and Trane and American Standard for residential HVAC.

Approximately 68% of its $17.7 billion in 2023 revenue was from equipment sales, while the remaining 32% came from aftermarket service. Since 2020, it’s grown its revenue by 12% compounded annually, while its adjusted EBITDA margin increased by 260 basis points over the past three years to 18%.   

Over the past four years, it has deployed $9 billion in capital to all five capital allocation levers, with dividends and share repurchases leading the way. 

In 2023, its share repurchases and dividends were $1.43 billion, down from over $1.8 billion a year earlier. That’s because it spent $863 million on acquisitions, nearly 4 times what it spent in 2022. 

All three of its geographic regions increased revenues and profits in 2023. For 2024, it expects 6-7% organic revenue growth, with earnings per share (EPS) of $10.15 at the midpoint of its guidance. That’s 29.2x its current share price. 

Long-term, you will make money from this well-run business. Climate change is becoming a major worry for nations everywhere and Trane is a company leading the way in climate innovation. It’s a good bet if you’re looking for non-tech stocks to buy.

On the date of publication, Will Ashworth did not hold (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.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

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