This list of growth stocks investors have to choose from is relatively long. Indeed, most growth stocks provide significant volatility. In this market, that’s not necessarily a great thing.
That said, this bucket also includes companies that are also relatively stable. These are companies operating in mature industries with a track record of delivering value to shareholders. Traditionally, growth stock investing is more geared toward upside potential at all costs, thus introducing greater risk.
However, investors realize the more significant potential for long-term wealth creation by investing in stable growth stocks. Moreover, finding high-growth companies that tend to be less volatile than other stocks can produce outsized gains, particularly for those on the more risk-averse end of the spectrum.
These are the top growth stocks on my list right now. Each of these companies provide impressive potential for capital appreciation over the long-haul.
|PXD||Pioneer Natural Resources||$206.33|
Caleres (NYSE:CAL) is a global footwear company that designs, manufactures, and markets several footwear brands. Its stock has growth potential based on a few critical metrics. The company’s business portfolio includes well-known brands such as Famous Footwear and Dr. Scholl’s. The company also distributes its products through department stores, online retailers, and wholesalers.
Based on one of the most basic metrics we can assess, the consensus analyst target price for this stock, CAL stock has a roughly 35% upside over its current $26.50 share price. That’s encouraging for investors, but there are other reasons to be excited.
For one, Caleres’ 3-year EBITDA growth rate of 59.8% is higher than 91% of the apparel manufacturing industry. A higher EBITDA generally correlates to greater operational efficiency, so Caleres appears to be a well-oiled machine.
Further, CAL stock boasts serious momentum over the trailing 12 months. That suggests that investing now represents a chance to catch the wave of momentum and associated capital returns.
Growth investors looking for stability should consider Avantax (NASDAQ:AVTA) stock. The Dallas-based firm offers financial services to individual investors and businesses. The company provides its customers various investment management, tax planning, and financial planning services. As readers may have guessed by its name, Avantax helps individuals and businesses find the most advantageous tax strategies.
AVTA stock boasts strong growth over the previous 12 months, increasing from under $20 per share to around $27 per share. With tax season underway, there’s good reason to believe its revenues will continue to grow and its share price will move higher.
While AVTA stock indeed boasts growth potential, it also represents value. Its price-earnings ratio of 3.3-times is meager by sector standards, and low relative to the company’s history.
Avantax is also quickly growing its assets under management (AUM). In 2022, the firm upped its AUM by $1.7 billion, a 79% increase over year-end totals in 2021.
Post Holdings (POST)
Defensive stocks such as Post Holdings (NYSE:POST) aren’t usually grouped within the growth category. However, the consumer packaged goods company recently expanded into a growth area with its $1.2 billion acquisition of several pet food brands from J.M. Smucker (NYSE:SJM). Post Holdings also operates as a contract manufacturer, and can generally be regarded as a defensive stock, as many of its products are essential staples that exhibit inelastic demand.
But back to that recent acquisition. Post Holdings splashed out $1.2 billion on Feb. 8 to acquire a line of brands that effectively establish a pet food platform for the firm. The company noted the growth potential in the category while also classifying the transaction as immediately accretive after one-time costs. Essentially, Post believes the large capital outlay will quickly pay for itself as consumers are increasingly willing to spend money on their pets.
Post Holdings raised its fiscal year 2023 guidance just days earlier, which also bodes well for investors.
CONSOL Energy (CEIX)
CONSOL Energy (NYSE:CEIX) stock represents a bituminous coal producer in Northern Appalachia. CEIX operates several mines and related facilities in Pennsylvania and West Virginia and has a diverse customer base, including utilities, industrial customers, and export markets. Primarily, CONSOL Energy sells to power generation plants and metallurgical end-users.
CEIX stock has momentum on its side. That leads investors to be keen on the shares. Yet, there’s plenty of remaining upside. Analysts expect CEIX stock to reach nearly $80 in the next 12-18 months. That’s significantly higher than its current price of less than $60. Factor in its quarterly $1.10 dividend, and its growth potential is much more significant.
There are several reasons to anticipate that CEIX shares should continue to grow. For one, the company’s earnings per share have increased 66.9% over the past three years. And its free cash flow growth rate of 69.3% over the past three years is another robust metric for the firm, suggesting that its share price will continue its upward trend.
MSA Safety (MSA)
MSA Safety (NYSE:MSA) is an industrial stock with a solid upside. The company manufactures and supplies safety products for workers in hazardous environments. That portfolio includes respiratory protection equipment, gas detection instruments, fall protection systems, and fire helmets. MSA serves the broader industrial sector, including construction, mining, oil and gas, and public safety.
Growth is most often associated with share prices that are expected to rise. MSA stock is expected to appreciate, but also has a rock-solid dividend. It yields a modest 1.39% but its distribution hasn’t been reduced since 1971. That means it’s a dividend king following 50+ years of uninterrupted dividend growth.
Investors should logically anticipate growth that will flow from its growing business. MSA Safety reported record Q4 revenue of $443 million recently and a record $1.53 billion in 2022 revenue. That strong momentum is expected to continue as the company addresses an order backlog throughout 2023, which indicates top-line growth is to continue.
Roper Technologies (ROP)
Roper Technologies (NYSE:ROP) provides software and engineering solutions to various industries. The company’s portfolio includes products and services in software-as-a-service (SaaS), instrumentation, imaging, and network software. Roper Technologies is industry agnostic, serving diverse customers in the healthcare, transportation, energy, and academia sectors.
The company has exhibited strong results recently, with earnings beats in the past four quarters. Several of those earnings moments exceeded the high end of the analyst range. So, it’s clear that the company can provide rapid growth.
And that is reflected in its most recent earnings report. The company’s Q4 revenue increased by 14% to $1.43 billion and 11% in 2022, reaching $5.37 billion.
Roper views its diverse customer base as a strong tailwind for the remainder of 2023. It also believes demand for what it refers to as ‘mission critical software’ will cause revenues to rise 5-6% in 2023.
Pioneer Natural Resources (PXD)
Pioneer Natural Resources (NYSE:PXD) is an independent energy company that explores, develops, and produces oil and gas resources in the United States. The company has a diversified portfolio of assets that spans the Permian Basin, the Rockies, and the Mid-Continent region.
Like many energy firms, Pioneer Natural Resources had an excellent 2022. Q4 and full-year cash flows reached $1.7 billion and $8.4 billion, respectively. Additionally, the company repurchased $1.65 billion of shares in 2022. Its stock provides a sky-high dividend yield of 13% currently. Such a high yield generally indicates higher risk. However, the analysts covering PXD stock expect it to move $50 upward from its current $209 share price.
It also created a lot of value in 2022 based on its return on invested capital of 30%. That’s an impressive number, but not much higher than its historical ROIC of 24.93%.
On the date of publication, Alex Sirois 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.