Best Semiconductor Stocks to Buy for High Returns in 2024
With technology and AI taking over the world, it is no surprise that the demand for semiconductor stocks is peaking. These stocks are growing and will keep growing with technology. If you are looking to invest in stocks in 2024, consider semiconductor stocks.
Confused about which one to invest in? We are here to help you. First, let us understand what semiconductor stocks are and how they work.
What do you mean by semiconductor stocks?
To start with, semiconductors, made up of silicon and germanium, are materials capable of regulating the flow of electricity. Unlike metals with high resistance, semiconductors efficiently enable temperature adjustments in devices. These semiconductors are found in various electronic devices since they are crucial in managing and moderating electrical conductivity. But why are semiconductor stocks significant?
The simple reason is that semiconductors are present in almost every gadget you use today. From your credit card and TV remote to the vehicles you travel in contain semiconductors. Even AI, and all modern technologies use semiconductors. One cannot imagine a life without semiconductors, making them all the more precious.
This could be the best time for you to invest in semiconductors since the government of India is subsidising the production cost of semiconductors to encourage more companies in India to manufacture semiconductors in-house to avoid reliance on international imports. This will eventually increase production and sales, allowing you to yield growth in your investments.
What are the best semiconductor stocks to invest in 2024?
Now that you know what semiconductor stocks mean and why you should invest in them, let us identify some stocks expected to grow in 2024.
L&T Technology Services
Established in 2012, LTTS is an engineering services provider delivering solutions in engineering, research and development, and digitalisation across various industries. The company serves 69 Fortune 500 companies with clients across 25+ countries worldwide.
LTTS has had a great track record of an ROE of 23.7% in 3 years and has also maintained a dividend payout of 38%, which makes it a great investment option.
Tata Elxsi Ltd
Tata Elxsi is a prominent provider of design and technology services, specialising in automotive, broadcast, communications, healthcare, and transportation. It is also a globally recognised brand, offering integrated solutions and adapting to up-and-coming technology to meet customer needs.
Elxsi has projected a profit of 25.7% CAGR over the last five years and continues to deliver a dividend payout of 59.8%. It has also maintained an ROE of 36.8% in 3 years, making it a promising stock.
Aeroflex Industries Ltd
Established in 1993, Aeroflex Industries Ltd is a leading Indian manufacturer of stainless steel and bronze metallic flexible flow solutions. The company has actively maintained environmental sustainability and aims to deliver efficient services and high-quality products to diverse clients in India and 80+ countries.
Aeroflex is almost debt-free and has an impressive CAGR of 252% over the last five years. It has also maintained an ROE of 29.3% in 3 years.
Cyient Ltd
Cyient, formerly Infotech Enterprises Limited, is an Indian multinational technology company specialising in engineering, manufacturing, data analytics, and networks and operations. Established in 1991 in Hyderabad, it is one of the world's top 30 outsourcing companies.​​​​​​​
Cyient provides a good dividend of 52.7% and an ROE of 16.6%, which is a good sign for your investment.
Dixon Technologies (India) Ltd
Dixon Technologies (India) Ltd is a design-centric solutions company that dominates India's consumer durables, lighting, and smartphone manufacturing. Being one of India's largest LED TV manufacturers, Dixon caters to over 35% of the country's demand.
Dixon has relatively reduced debt and has delivered a profit growth rate of 33.3% CAGR in the past five years. It also provides an ROE of 22.5%, making it an ideal investment choice.
Conclusion
Semiconductor stocks could be your ideal choice if you want to invest long-term. However, make sure you check your investment portfolio's risk tolerance before making any decisions. Remember, although semiconductor stocks look promising, the market changes every day, and you need to stay updated to ensure you align your investments according to your financial goals.
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