Growth stocks have been favored by investors over the last decade thanks to their ability to borrow cheap capital, innovate quickly, and acquire other businesses with ease. Last year, growth stocks performed exceptionally well thanks to new trends driven by the COVID-19 pandemic. This is evidenced by the SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 31.1% returns over this period versus the broader index’s 18.2% gains.
While progress on the mass vaccination and economic recovery fronts has this year caused investors to rotate away from expensive growth stocks to quality bargains, some stocks look sufficiently promising to generate growth in the recovering economy. In fact, the post-pandemic economy is expected to see the emergence of a new class of growth stocks that will capitalize on the economy’s partial return to "analog" activities.
Becton Dickinson & Co. (BDX), Laboratory Corporation of America Holdings (LH), and Generac Holdings Inc. (GNRC) are companies that have been experiencing high growth in terms of both revenue and EPS. So, we think these stocks could be great picks now.
Becton Dickinson & Co. (BDX)
BDX focuses on providing medication management and patient safety solutions. The company’s solutions include respiratory care, improving drug delivery, supporting the management of diabetes, and more. BDX has gained 2.9% over the past year to close yesterday’s trading session at $244.62.
BDX has announced plans to invest $65 million to improve key supply chain infrastructure in Tucson, Arizona. The company recently received emergency-use authorization for its coronavirus testing solution.
BDX’s trailing-12-month revenue has grown at a CAGR of 10.2% over the past five years. Its BDX’s trailing-12-month ebitda has grown at a CAGR of 17.1% over the past three years.
BDX is expected to see 14.8% revenue growth for the quarter ended March 31, 2021 and 14.2% in 2021. The company’s EPS is estimated to grow 19.2% for the quarter ended March 31, 2021 and 12% per annum over the next five years.
BDX’s strong fundamentals are reflected in its POWR Ratings. The stock has a B overall rating, which equates to Buy in our proprietary ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.
It has an A grade for Growth and Sentiment, and B for Stability and Value. In the Medical – Devices & Equipment industry, it is ranked #30 of 183 stocks.
In total, we rate BDX on eight different levels. Beyond what we stated above we have also given BDX grades for Momentum, and Quality. Get all the BDX ratings here.
Click here to checkout our Healthcare Sector Report for 2021
Laboratory Corporation of America Holdings (LH)
LH operates as an independent laboratory company. The company has global operations. It recently added a high sensitivity antigen test to screen for coronavirus infection. The company has also been awarded a contract by the CDC to study COVID-19 variants and make public health responses better. LH has returned 99.3% over the past year to close yesterday’s trading session at $251.87.
LH is expected to see revenue growth of 38.7% for the quarter ended March 31, 2021 and 2.2% in 2021. The company’s EPS is estimated to grow 211% for the quarter ended March 31, 2021 and 10.9% per annum over the next five years.
The company’s trailing-12-month revenue has increased at a CAGR of 10.5% over the past five years. LH’s trailing-12-month ebitda has increased at a CAGR of 25.4% over the past three years.
It’s no surprise that LH has an overall A rating, which equates to Strong Buy in our POWR Ratings system. LH has an A grade for Growth, and B for Quality and Value. In the Medical – Diagnostics & Research industry, it is ranked #3 of 56 stocks.
Click here to see the additional POWR Ratings for LH (Sentiment, Momentum, and Stability).
Click here to checkout our Healthcare Sector Report for 2021
Generac Holdings Inc. (GNRC)
GNRC manufactures and markets power generation equipment. The company has operations primarily in the U.S., Canada, and internationally.
GNRC is expected to see53.2% revenue growth for the quarter ended March 31, 2021 and 29.2% in 2021. The company’s EPS is estimated to grow 112.6% for the quarter ended March 31, 2021 and 8% per annum over the next five years. GNRC’s stock price has increased 262.7% over the past year and its last closing price was $333.64.
GNRC has opened a new manufacturing facility in South Carolina to expand its supply of home standby generators. The company also recently acquired Enbala Power Networks.
GNRC’s trailing-12-month revenue has increased at a CAGR of 13.5% over the past five years. Its trailing-12-month ebitda has increased at a CAGR of 22.3% over the past three years.
GNRC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary ratings system. GNRC has an A grade for Growth, Momentum, and Quality and B for Sentiment. In the A-rated Industrial - Machinery industry, it is ranked #31 of 87 stocks.
Beyond what we stated above we also have given GNRC grades for Value and Stability. Get all the GNRC ratings here.
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BDX shares were trading at $243.55 per share on Wednesday morning, down $1.07 (-0.44%). Year-to-date, BDX has declined -2.34%, versus a 9.07% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.
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