It might seem a risky time to be buying growth stocks, but the five stand-out tickers below are all looking like buys today. From health care to funerals and fuel cells to energy services, the following is a diversified list for capital gains investors looking for companies with forecasts for high annual growth in earnings.
Park Lawn (TSX:PLC)
Overvalued by 4.5 times its future cash flow value, this go-to funeral and memorial stock might not be one for value investors. Its P/E is off the dial at a staggering 134 times earnings, though a P/B of 1.4 times book indicates that you’re getting good value in terms of assets. What’s driving that high P/E? A massive 117.7% expected annual growth in earnings. Low debt and a dividend yield of 1.7% round off a quality growth stock.
STEP Energy Services (TSX:STEP)
Discounted by +50% compared to its future cash flow value, STEP Energy Services looks like a safe bet today and a great buy if you like your stocks cheap and cheerful. Its multiples are nearly perfect: a P/E of 8.4 times earnings and PEG of 0.2 times growth look good, and it’s trading at book value.
STEP Energy Services doesn’t pay a dividend, but that’s not what high-growth stocks are about. A fairly sturdy buy, though with some debt to think about, the main draw is a 40.5% expected annual growth in earnings.
Overvalued by four times its future cash flow value and with a P/B of 4.9 times book, Ballard Power Systems is another stock for pure high-growth lovers and not for the bargain hunters. A 71.9% expected annual growth in earnings is what this stock is all about. It’s a great little tech stock, just right for diversifying a growth portfolio with battery exposure. Ballard Power Systems holds very little debt — just right for the more risk-averse trader.
Guyana Goldfields (TSX:GUY)
If you’re looking for South American gold exposure, this is your guy. This stock is discounted by 10% compared to its future cash flow value today, and it has some great looking fundamentals: a P/E of 15.5 times earnings, PEG of 0.4 times growth, and a P/B of 1.2 times book. Growth-wise, you’re looking at a 42.5% expected annual increase in earnings. It holds low debt, too, which is always good to know with mining stocks.
A little bit tech, a little bit health care, Savaria is a global leader in personal mobility and a very tempting stock. It’s a little pricey at just shy of twice its future cash flow value, though its multiples aren’t all bad: a P/E of 32 times earnings reflects the growth ahead, while a PEG of 13 times growth and four P/B of times book are just about okay for the industry. An expected annual growth in earnings of 24.3% is what we’re really here for, though a dividend yield of 2.02% with today’s share price is a nice extra.
The bottom line
If you’re looking for growth stocks but don’t want the volatility of weed, the five options above might be for you. What’s interesting about the list is that the stocks are largely defensive, with gold, health care, and energy services featuring. If you’re less risk averse than the dividend portfolio crowd or want to have a flutter on a stock that offers upside, these ones may be for you.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Savaria is a recommendation of Hidden Gems Canada.