Some people like growth stocks…others prefer value…or momentum…or income.
But why settle for just one attractive attribute when you can have them all?
This stock search started with over 8,000 and ended with only 5 stocks that combine the best of all these worlds. Let’s dig into each parameter so you appreciate what is inside all 5 of these extraordinary stocks.
Growth
I am sure this is not the first time you heard that the earnings growth rate is slowing down. In fact, it is projected to be negative year over year in this Q2 earnings season before turning up a notch in the second half of the year.
When there is such a shortage of growth, then investors should put a premium on companies excelling above the norm. That is why I made sure that all of these stocks were expected to enjoy at least 10% earnings growth on average for the next few years.
Value
There are may ways to measure value. But most of those metrics lead to low growth stocks that are in a word… “BORING”. When you are seeking growth stocks, then you need something better than just low PE.
The PEG ratio is a notch better, but it also misses some important concepts that are unique about different industries. Some are more about earnings…some more about cash flow…some more cyclical…some more (fill in the blank).
The solution for value is to use the average target price from Wall Street analysts. These industry experts appreciate the nuance of each group and what is the best way to measure value. So in this case all of our stocks have at least 20% upside to reach their fair value targets.
Momentum
This one is easy. We are going to rely upon the POWR Ratings system which is focused on stocks displaying the best momentum. In this case I widened our lens one notch to include both A & B rated shares. Meaning just the Buy rated stocks…no Holds or Sells.
Income
As bond rates go lower, stock income becomes that much more attractive. So I wanted all the stocks to at least produce income above the level of the 10 year Treasury.
The lowest yield in the group is still a solid 2.58%. Then we jump from there to almost 5%. And the final selection is all the way up 8.60% yield. Long story short, there is plenty of income here to help pad the final return.
Putting It Altogether
The point of this strategy was not to settle for just one attractive element. We wanted to load up on as many positive attributes as we could. But gladly each type of investor should find at least one that floats their boat.
Growth investors will go for LSI Industries (LYTS) with the 25% growth rate. Value folks will likely agree because it also has the most upside potential followed by Orange (ORAN). Whereas the income folks will skew towards Hess Midstream (HESM) and Oasis (OMP).
All the stocks have momentum given the inclusion of the POWR Rating. But remember there are 4 sub components of the rating that help you lock down on the best shares (Buy & Hold Grade, Trade Grade, Industry Rank, Peer Grade).
Just click on the tickers below to continue your research and discover the component POWR Ratings on each stock.
Company | Ticker | Price | Target Price | Upside % | Market Cap ($mil) | Div Yield % | Est. Growth Rate % |
LSI Industries | LYTS | $4.05 | $6.00 | 48.15% | $105 | 4.94 | 25 |
Orange-Adr | ORAN | $15.03 | $20.60 | 37.06% | $39,981 | 4.76 | 12 |
Melco Resorts | MLCO | $23.75 | $30.73 | 29.39% | $11,740 | 2.58 | 21 |
Hess Midstream | HESM | $20.88 | $26.00 | 24.52% | $571 | 7.34 | 11 |
Oasis Midstream | OMP | $21.85 | $26.43 | 20.96% | $738 | 8.60 | 11 |
To see the full list of top rated high yield stocks, regardless of POWR Rating, then click here.
Also here are links to 3 other popular destinations to make the best use of the POWR Ratings:
Full List of “A ”Rated Strong Buy Stocks– See all the top rated stocks.
About the POWR Ratings– Learn what’s build inside the POWR Ratings that helps find stocks ready to outperform.
Reitmeister Total Return portfolio. This is where Steve Reitmeister employs his 40 years of investment experience to hand select the best POWR Ratings stocks.
About the Author
Steve Reitmeister is the CEO of the Stock News Network bringing 40 years of experience to help individual investors find outperformance. For the better part of the past two decades he was the Editor-in-Chief of Zacks.com where millions of investors enjoyed his timely market insights. His commentary has also been featured on other leading investment websites including Yahoo Finance, SeekingAlpha, CNNMoney and MarketWatch. Steve has an MBA from DePaul University and B.A. in Economics from the University of Wisconsin (Go Badgers!).
MLCO shares were unchanged in after-hours trading Wednesday. Year-to-date, MLCO has gained 39.66%, versus a 20.07% rise in the benchmark S&P 500 index during the same period.
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More Resources for the Stocks in this Article
Ticker | POWR Rating | Industry Rank | Rank in Industry |
MLCO | Get Rating | Get Rating | Get Rating |
Get Rating | Get Rating | Get Rating | |
Get Rating | Get Rating | Get Rating | |
Get Rating | Get Rating | Get Rating | |
Get Rating | Get Rating | Get Rating |