Strong quantitative screens will show investors a variety of growth stocks to buy. For example, StockRover is a screening service that scores stocks on three key metrics. One, growth scores are based on five year historical growth, compared to forward EBITDA estimates. Two, quality scores depend on profitability and a healthy balance sheet. Three, value scores are based on the usual price-to-earnings multiple and earnings per share predictability. Quant scores offer investors a numerical characterization of a stock.
Conversely, investors should still consider companies with modest growth scores as a buy. They offer a well-balanced investment with strong value or quality. In addition, investors need to dig further to discover a company’s business growth prospects. Markets likely discovered firms that have a high growth score and lower value score. They are willing to pay a premium for the growth ahead. Conversely, companies that are not showing growth require a catalyst to unlock their profit expansion.
| BIP | Brookfield Infrastructure | $35.38 |
| CAG | Conagra | $37.35 |
| CCI | Crown Castle | $133.55 |
| GILD | Gilead Sciences | $84.11 |
| JPM | JPMorgan | $141.22 |
| WPC | WP Carey | $72.40 |
| WSO | Watsco | $316.58 |
Growth Stocks to Buy: Brookfield Infrastructure Partners (BIP)
Brookfield Infrastructure Partners (NYSE:BIP) is a highly attractive growth stock to buy after bidding $13.3 billion to buy Triton International (NYSE:TRTN), the world’s largest intermodal container leasing company.
Triton’s CEO, Brian Sondey, said that BIP has significant resources and long-term time horizon to fuel Triton’s business growth. In addition, BIP’s CEO, Sam Pollock, liked Triton’s business, supported by contracts, stable cash flow, strong margins, and a history of creating value.
I should also note that Brookfield increased its dividend by 6.3% to $0.3825 a share quarterly. In fiscal 2022, the company reported funds from operations of $2.1 billion, up by 20% from the previous year. It owes its strong financial and operating growth to global volume growth for critical infrastructure networks.
Conagra Brands (CAG)
Conagra Brands (NYSE:CAG) reported diluted earnings per share increasing by 57.8% to 70 cents. In 2023, it expects organic net sales growth of up to 7.5% Y/Y. EPS will grow by between 14% to 17%.
Conagra is among the growth stocks to buy for its product catalyst. Frozen and snack foods are the basis of its strong performance. The business recovery will accelerate as management invests in brand-building support and ongoing product innovation.
Conagra enjoys resilience from inflation. It may increase prices to match inflation without hurting demand. The company reported consistent demand elasticity over the last eight quarters. Once inflation rates slow, Conagra will slow its pace of price hikes. This should strengthen demand and expand its profit margin.
Crown Castle (CCI)
Crown Castle (NYSE:CCI) is a REIT in the shared communications infrastructure sector, with a strong quality score. The tower business grew at 6.5% in 2022. This will grow from 5% to 6% in 2023. Crown Castle’s big wireless carriers need to compete on network quality. They will commit to heavy investments to strengthen the network. This could push CCI’s growth to at least 6.5% in the years ahead.
CCI stock suits income investors since the company has a goal of growing the dividend from 7% to 8% annually. However, from 2024 to 2025, dividend growth will slow to adjust for higher interest rates. In addition, T-Mobile (NASDAQ:TMUS) and Sprint merging will increase churn and lower revenue. After that disruption, Crown Castle’s growth will resume.
In the second half of this year, the company will update investors with a stronger outlook. It may rely on predictable, long-term agreements with its major customers.
Gilead Sciences (GILD)
Gilead Sciences (NASDAQ:GILD) has a strong commitment to improving the health of people and communities worldwide. By developing drugs to treat more challenging diseases, Gilead is poised to accelerate its growth.
In 2022, sales of Biktarvy, which treats HIV-1, grew by 20% to $10.4 billion. In 2023, the business will grow by between 4% to 6%. The U.S. approved Sunlenca (Lenacapavir), an antiretroviral medication used to treat HIV/AIDS. This is for patients who have multi-drug-resistant HIV infection. In the quarters ahead, Gilead will partner with the HIV community to increase Sunlenca awareness. This will accelerate the drug’s sales growth.
Gilead has a strong product pipeline. It will meet key milestones in 2023, which should drive GILD stock prices higher. For example, it will post data readouts for products in the oncology and neurology units. Investors enjoy a diversified pipeline, supported by 59 clinical programs.
JPMorgan Chase (JPM)
JPMorgan Chase (NYSE:JPM) has strong value to offset its near-term slow growth. After forecasting sharply higher net interest income for the year, JPM stock will rise along with its growth grade.
In the fiscal first quarter of 2023, JPMorgan posted revenue growing by 24.8% Y/Y to $38.3 billion. It booked $20.7 billion in net interest income. The more deposits it attracts, the higher the NII. For the full year, FY2023 NII of $81 billion is sharply above the approximately $74 billion previous target.
Credit card spending, automotive loans, and private banking advisory growth will increase the bank’s profits this year. CEO Jamie Dimon expects bank headwinds related to the Federal Reserve interest rate tightening. It does not expect a credit crunch that would devastate the banking system. However, the firm is ready for recessionary conditions.
JPMorgan may grow its market share by leveraging the strength of its capital and liquidity. It will issue loans without undermining its strong underwriting standards.
WP Carey (WPC)
WP Carey (NYSE:WPC) is a REIT. It will fuel its growth by focusing on its core geographies. It has investing experience in Europe that began in 1998.
Other REITs are suffering from cap rate pressures related to weak economic conditions. W.P. Carey is taking advantage of the weak market conditions through acquisitions, sale-leasebacks, or dictating favorable pricing terms. It has a competitive advantage in sale-leasebacks, helped by its experienced advisors. In addition, companies are focused more on execution than on price.
CEO Jason Fox said that WPC has some pricing power to maximize returns. It developed relationships and has a history of executing successfully its business plan. WPC has a cap rate target in the 5% to 7% range. Its target range is 6.5% to 7.0% for acquisitions. Expect the company to announce deals that boost the bottom line. Among the REITs, WPC is one of the best growth stocks to buy.
Watsco (WSO)
Watsco (NYSE:WSO) is a distributor of air conditioning, heating, and refrigeration equipment. The highly profitable firm offers investors top dividends. UBS included the company as one of the firms that are relative winners in a recessionary environment.
Watsco is working collaboratively with its OEM partners to develop its growth initiatives. In addition, it is investing in technology to widen its advantage. Technologies that increase the company’s engagement with customers will lower attrition. As a result, Watsco will sustain long-term market share gains.
Watsco may count on heat pump growth to increase revenue. In the last quarter, the duct-free split market grew by a double-digit percentage. Its partnership with OnCall Air will give Watsco a presence in the online sales channel. This competitive edge will expand its profits.
Ductless split systems are another growth opportunity. Homes that need ductwork may count on Watsco. This will lead to a rebound in HVAC system sales in 2023.
On the date of publication, Chris Lau did not have (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.