Amid the sky-high inflation and the Fed’s aggressive rate hikes, market volatility is rife, as is evident from the CBOE Volatility Index’s 65% year-to-date gains. However, despite rising recession fears, Wells Fargo analysts expect the U.S. economy to grow at an annualized rate of 2.8% in the third quarter.
Moreover, benchmark indices have gained substantially in October on optimism over initial corporate earnings beats. The S&P 500 gained 4% over the past month, while the Dow Jones Industrial Average gained 7.9%.
Regardless of the market conditions, growth stocks Marathon Petroleum Corporation (MPC), Forrester Research, Inc. (FORR), and Civeo Corporation (CVEO) could be attractive investments at the current low-price level to generate significant returns in the long run.
Marathon Petroleum Corporation (MPC)
MPC and its subsidiaries primarily operate as an integrated downstream energy company in the United States. It operates in two segments: Refining & Marketing; and Midstream.
On August 2, 2022, President and CEO Michael J.Hennigan said, “We accomplished a lot during the quarter, our team delivered on supplying products to meet strong market demand. Utilizing the proceeds from the Speedway divestiture, we have completed approximately $12 billion of our $15 billion return of capital program.”
MPC’s revenue and EPS have grown at 13% and 46.2% CAGRs, respectively, over the past three years.
MPC has paid dividends for 10 consecutive years. Its dividend payouts have increased at 9.4% CAGR over the past five years. Its current dividend yield is 2.08%, and its four-year average yield is 4.18%.
MPC’s total revenues and other income came in at $54.24 billion for the second quarter that ended June 30, 2022, up 81.8% year-over-year. Its sales and other operating revenues increased 81.6% year-over-year to $53.80 billion. Moreover, the company’s income from continuing operations increased 763% year-over-year to $8.33 billion.
Street expects MPC’s revenue to increase 42.9% year-over-year to $172.78 billion in 2022. Its EPS is estimated to increase 853.1% year-over-year to $23.35 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past year, the stock has gained 63.4% to close the last trading session at $111.44.
MPC’s POWR Ratings reflect its solid prospects. It has an overall rating of A, equating to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
MPC also has an A grade for Growth, Momentum, and Quality. It is ranked #7 out of 94 stocks in the B-rated Energy – Oil & Gas industry. Click here to access the additional POWR Ratings for MPC (Stability, Value, and Sentiment).
Forrester Research, Inc. (FORR)
FORR is an independent research and advisory firm. The company operates through the Research; Consulting; and Events segments. Its primary subscription research product is Research, which offers clients access to its research designed for strategic decision-making.
On July 29, 2022, George F. Colony, Forrester’s chairman, and CEO, said, “This was another strong quarter for us. We continued to experience double-digit contract value growth and delivered revenue growth of 15% for the period. Additionally, we had strong adjusted EPS performance.”
FORR’s revenue and EBITDA have grown at 8.4% and 25.6% CAGRs, respectively, over the past three years.
FORR’s total revenues came in at $148.25 million for the second quarter that ended June 30, 2022, up 15.2% year-over-year. Its net income increased 66.3% year-over-year to $13.87 million. Moreover, the company’s EPS increased 67.4% year-over-year to $0.72.
Analysts expect FORR’s revenue to increase 9.4% year-over-year to $540.98 million in 2022. Its EPS is estimated to increase 10% year-over-year to $2.3 in 2022. It surpassed EPS estimates in all four trailing quarters. Over the past months, the stock has gained 15.6% to close the last trading session at $40.74.
FORR has an overall A grade, equating to a Strong Buy in our POWR Ratings system. Also, it has an A grade for Growth, Sentiment, and Quality and a B for Stability and Value. It is ranked first among 105 stocks in the Financial Services (Enterprise) industry. Click here to access the FORR ratings for Momentum.
Civeo Corporation (CVEO)
CVEO provides hospitality services to the natural resource industry in Canada, Australia, and the United States. The company develops lodges, villages, and mobile accommodations, including modular, skid-mounted accommodations, and central facilities that provide long-term and temporary workforce accommodations.
On August 15, 2022, the company agreed to repurchase approximately 375 thousand CVEO common shares, representing 2.6% of the fully-diluted common shares outstanding, from a shareholder, for around $10.70 million. This agreement is expected to boost CVEO’s future growth outlook.
CVEO’s revenue and EBITDA have grown at 12.6% and 13.3% CAGRs, respectively, over the past three years.
CVEO’s total revenues came in at $184.95 million for the second quarter that ended June 26, 2022, up 20% year-over-year. Its net income came in at $9.08 million, compared to a loss of $0.47 million in the previous-year period. Moreover, the company’s EPS came in at $0.54, compared to a loss per share of $0.03 in the same period the prior year.
Street expects CVEO’s revenue to increase 11.9% year-over-year to $664.99 million in 2022. Its EPS is estimated to grow15% per annum for the next five years. Over the past nine months, the stock has gained 43.7% to close the last trading session at $29.44.
CVEO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system.
It has an A grade for Sentiment and a B for Stability, Sentiment, Quality, and Value. CVEO is ranked first among 45 stocks in the B-rated, Outsourcing – Business Services industry. Click here to see the additional POWR Rating for CVEO (Momentum).
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MPC shares were trading at $113.71 per share on Wednesday afternoon, up $2.27 (+2.04%). Year-to-date, MPC has gained 81.19%, versus a -18.42% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions. More...
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