You Can Do Better Than SpaceX. 2 Growth Stocks to Buy Now

Space Exploration Technologies (NASDAQ: SPCX), commonly called SpaceX, certainly grabbed the media and investors' attention over the last couple of months. Following the initial public offering (IPO), any investor who chooses can invest in the Elon Musk-led company.

But the valuation for this currently money-losing company should give investors pause. It's also a sprawling business that's difficult to analyze. It includes a social media site, the making and launching of rockets, broadband, and artificial intelligence.

Turning to other growth companies, these two consumer goods sector companies seem like better investment alternatives. They're profitable, growing, and trade at much more reasonable valuations than SpaceX.

Here's a closer look at each one.

Image source: Getty Images.

1. Amazon

When many people think about Amazon (NASDAQ: AMZN), its online business and devices like Alexa come to mind. These are part of the company's North American and international divisions, which produce most of the company's sales. Its fast-growing cloud-computing business, Amazon Web Services (AWS), accounts for most of the company's profit.

AWS continues to grow sales and profits at a rapid clip. It was already doing well, and the fast adoption of generative artificial intelligence means an even bigger role for its data centers.

The business has a competitive advantage due to Amazon's enormous size, given the vast resources needed to build and maintain data centers. That makes it hard for new entrants to enter the space. Among the three biggest companies, AWS has the highest market share, at 28% at the end of the first quarter. Microsoft's Azure and Alphabet's Google Cloud are the other major competitors.

AWS' second-quarter sales grew 36.8% year over year to $42.2 billion, pushing operating income 63.6% higher to $16.6 billion.

The lower-margin North American and international segments have also been doing well. Amazon's total sales grew 19.6% compared to a year ago, reaching $200.6 billion.

Meanwhile, the valuation became more attractive this year, as measured by the price-to-earnings (P/E) ratio. With investors concerned about management's capital expenditures, including $220 billion this year,the P/E multiple contracted from well above 30 to 22. The shares have become less expensive than the S&P 500 index, which currently has a P/E ratio of 29.

2. TJX Companies

TJX Companies (NYSE: TJX) sells discounted apparel and home goods. The company has been in business for nearly half a century, so it's been doing things right for a long time.

It's an off-price retailer. That means its retail brands, including TJ Maxx, Marshalls, and HomeGoods, buy merchandise from manufacturers at steep discounts. Wholesalers agree to these prices for different reasons, such as excess inventory due to faltering demand, canceled orders from other retailers, and out-of-season items. The company typically passes savings on to customers, seeking to offer merchandise at 20% to 60% lower than traditional retailers.

The business model means the company does better during difficult economic times, since wholesalers have more inventory, and TJX has more negotiating leverage. With consumers stressed from high prices, this is one of those times.

TJX's same-store sales (comps) across all its brands have continued to show strong growth. Overall, fiscal Q1 comps increased 6%, and it's not merely growing sales. Diluted earnings per share increased 29% to $1.19. The results were for the period ended on May 2.

It also continues to expand. Last year, TJX opened 129 new stores, added another 48 in Q1, and ended the period with 5,262 locations.

This year, TJX's shares, up 2.6%, have underperformed the S&P 500's 11% gain. That's created a better valuation, however. TJX's P/E ratio contracted from 34 to 31 during this time.

Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and TJX Companies. The Motley Fool has a disclosure policy.