Many S&P 500 companies have lower earnings and poor outlooks this year. Stock market volatility has affected investors since the pandemic. People are more cautious than ever about their investments. Fortunately, there are several alternatives to these famous names. Smaller companies present great investment opportunities for those looking for consistent returns and long-term growth potential.
Most importantly, these companies remain immune to the political shock and surprising news that could affect the larger organization. Expanding companies are also likely to offer better dividend yields and yields. Below we've rounded up ten small-cap stocks with huge growth potential. let's see.
1. Diversey Holdings Ltd.
Diversey Holdings is known for its cleaning, sanitation and hygiene products and is the second largest company in the industry after Ecolab. Despite being the second largest organization, Diversey Holdings is much smaller and less profitable than Ecolab. is valued at $2 billion, while Ecolab is valued at $40 billion. The company went public after privatization. The 60% drop in Diversey Holdings shares was reflected in the share price. But as its main customers -- the restaurant and hospitality industry -- recover from the pandemic, Diversey's stock could rise in value.
2. First of Long Island Corp
Founded in 1927, First of Long Island Corp has served the New York metropolitan area for nearly a century. What sets it apart from other regional banks is its focus on real estate
trade. The bank makes loans for the construction, purchase and renovation of homes and does not offer short-term loans, auto loans or credit. The stock yields 4.8%, which is attractive for investors.
3. Fastly Inc.
This cloud infrastructure project management business is sometimes a small-cap stock. The company's stock price hit $120 a share as the tech sector rallied. High demand for cloud computing services has made Fastly one of the biggest names in the tech industry. However, shares are down 90% since the peak of the pandemic. Unfortunately, high and unmanageable operating costs did not support the company's growth. Still, Fastly reports annual revenue of $400 million and is expected to grow by double digits. Its market capitalization has recently dropped to $2 billion.
4. Ruth's Hospitality Group Inc.
Ruth's Hospitality Group is one of the largest steakhouse companies in the United States. The company has 150 restaurants in the United States and 23 restaurants in international countries including Japan and Singapore.
The company reported a 13.8% increase in its restaurant sales to $475.4 million by 2022. This growth will continue in 2023 as restaurants recover from the pandemic. Additionally, Ruth's Hospitality has transformed its services from restaurant operations to digital service offerings. While shares fell briefly as beef prices rose, they are expected to rise once inflation moderates.
5. Beazer Homes USA Inc.
The homebuilder has had its ups and downs during the pandemic, just like the other small caps on this list. They operate in 20 metropolitan areas across the United States. Beazer has gone through boom phases with sharply rising housing demand and a healthy economy. Still, rising inflation and rising interest rates are hampering people's ability to buy a home. As a result, Beazer reported a 2% drop in its annual sales, but was able to offset the loss by raising selling prices by 22%.
6. Proterra
Proterra, a well-known U.S. auto and energy storage company, is a small-cap stock for investors looking for a steady income. Although its stock price has experienced a decline in 2022, the company is recovering rapidly. With more than 700 buses delivered, Proterra has become the leading supplier of electric buses in the United States. Demand for electric vehicles has soared as governments and citizens turn their attention to reducing emissions. The company aims to achieve a $2.50 profit by 2025. Overall, it's a solid pick for long-term growth investors.
7. Pactiv Evergreen Inc
Pactive Evergreen has a market cap of $2 billion and reported revenue of up to $6 billion. It is a product packaging service provider offering lids, boxes, food containers and other items in this category. Pactiv offers a 3.6% dividend yield. Despite being a low-margin, highly competitive company, Pactiv Evergreen is doing well in terms of revenue.
8. Delek US Holdings
Delek America Holdings, which owns four refineries in South America, dabbles in oil shipping. 2022 is set to be a stellar year for the refining industry, which has experienced boom times brought on by the recession, as demand for petroleum products increases. With a market cap of $1.37 billion, Delek US Holdings is a solid investment this year.
9. Altimmune
Altimmune's market capitalization is just $233.58 million, well below the other big names on this list. But the company has made big claims that could dramatically increase its sales and profitability. It gained popularity after clinical trials on obese and diabetic patients. Altimmune claims its anti-obesity drug is so effective it could offer a non-invasive alternative to bariatric surgery. The company's claims about its drug's potential have reached new heights after announcing victory in a phase I clinical trial.
10. Butterfield Bank
Bermuda-based Butterfield Bank is a specialty bank serving outlying territories such as the Cayman Islands, the Channel and Bermuda. A large portion of its revenue comes from fees, which protect the company from fluctuations in interest rates.
With few banking options for wealthy customers in these remote areas, competition is also limited. Butterfield Bank may take some time to maximize your returns, but given its 4.7% dividend yield and market dominance, this financial institution is an excellent portfolio diversification option.
These are the top 10 small caps for growth investors. You can research these companies in detail to learn more about what they do and their past performance so you can make an informed decision.