Opting for growth stocks as an investment strategy means strategically selecting companies expected to experience substantial growth. These companies are anticipated to grow at rates significantly higher than the average for the overall stock market. This exceptional growth potential makes them highly attractive to investors seeking significant returns. By carefully screening, investors can pinpoint stocks with significant growth potential.
Methodology: How Did We Choose These Stocks?
For this screener, the filters have been chosen to identify stocks with high growth potential and manageable risk.
Beta: A Beta greater than 1 indicates that the stock is more volatile than the overall market, which often correlates with higher growth potential.
EPS CAGR: The high EPS CAGR (Earnings Per Share Compound Annual Growth Rate) over the past five years exceeding 20% ensures that the companies have demonstrated substantial earnings growth, a key indicator of strong financial performance and future growth prospects.
Dividend Yield: A dividend yield (DY) of less than 2% suggests that these companies reinvest most of their earnings into the business rather than paying dividends, which is typical for high-growth companies focused on expansion and capital appreciation rather than income distribution.
Stock Market: We prioritized US-listed stocks for this screener.
Best Growth Stocks
Company Name | Stock Symbol | Sector | Beta | Basic EPS CAGR (5Y) | Dividend Yield |
JinkoSolar Holding Company Limited | JKS | Semiconductors & Semiconductor Equipment | 2.51 | 44.4% | 0.0% |
Tactile Systems Technology Inc | TCMD | Healthcare Equipment & Supplies | 2.07 | 27.9% | 0.0% |
Salesforce Inc | CRM | Software | 1.66 | 23.5% | 0.6% |
Gravity Co Ltd | GRVY | Entertainment | 1.57 | 33.2% | 0.0% |
Doximity Inc | DOCS | Health Care Technology | 1.48 | 142.5% | 0.0% |
Etsy Inc | ETSY | Broadline Retail | 1.38 | 31.2% | 0.0% |
Endava Ltd | DAVA | IT Services | 1.21 | 31.3% | 0.0% |
Under Armour Inc A | UAA | Textiles, Apparel & Luxury Goods | 1.20 | 20.9% | 0.0% |
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- JinkoSolar Holding Company Limited (JKS)
Beta: 2.51
Basic EPS CAGR (5Y): 44.4%
Dividend Yield: 0.0%
JinkoSolar Holding Company Limited manufactures and sells solar power products. - Tactile Systems Technology Inc (TCMD)
Beta: 2.07
Basic EPS CAGR (5Y): 27.9%
Dividend Yield: 0.0%
Tactile Systems Technology Inc provides medical devices for treating chronic diseases. - Salesforce Inc (CRM)
Beta: 1.66
Basic EPS CAGR (5Y): 23.5%
Dividend Yield: 0.6%
Salesforce Inc is a leading provider of cloud-based software solutions. - Gravity Co Ltd (GRVY)
Beta: 1.57
Basic EPS CAGR (5Y): 33.2%
Dividend Yield: 0.0%
Gravity Co Ltd develops and publishes online and mobile games. - Doximity Inc (DOCS)
Beta: 1.48
Basic EPS CAGR (5Y): 142.5%
Dividend Yield: 0.0%
Doximity Inc operates a digital platform for medical professionals. - Etsy Inc (ETSY)
Beta: 1.38
Basic EPS CAGR (5Y): 31.2%
Dividend Yield: 0.0%
Etsy Inc operates an online marketplace for handmade and vintage goods. - Endava Ltd (DAVA)
Beta: 1.21
Basic EPS CAGR (5Y): 31.3%
Dividend Yield: 0.0%
Endava Ltd provides IT services and solutions to businesses. - Under Armour Inc A (UAA)
Beta: 1.20
Basic EPS CAGR (5Y): 20.9%
Dividend Yield: 0.0%
Under Armour Inc A designs and manufactures performance apparel and accessories.
How to Find Growth Stocks
You can find growth stocks easily using Investing Pro. Here are the steps:
- Click on the Screener tool.
- Select ‘Beta’ as a filter parameter on the Screener page, and set the threshold value to greater than 1.
- For U.S.-centric stocks, select ‘United States’ under the ‘Trading Region’ tab drop-down, and make sure to check (select) the ‘Primary Trading Item’ option.
![](https://academy.education.investing.com/wp-content/uploads/2024/06/Screener-1-Growth-Stocks-1024x458.jpg)
- Add a filter for ‘Basic EPS CAGR (5Y)’ greater than 20%
![](https://academy.education.investing.com/wp-content/uploads/2024/06/Screener-2-Growth-Stocks-1024x487.jpg)
- Add a filter for ‘dividend yield’ less than 2%
![](https://academy.education.investing.com/wp-content/uploads/2024/06/Screener-3-Growth-Stocks-1024x539.jpg)
- You can then see the list of all the companies falling in the desired screener filters’ range arranged in a descending order.
Growth Stocks FAQ (Frequently Asked Questions)
What are growth stocks?
Growth stocks are shares in companies expected to grow at an above-average rate compared to other companies in the market. These companies typically reinvest their earnings into expansion, research and development, and other projects to fuel continued growth.
How do growth stocks differ from value stocks?
Growth stocks are often contrasted with value stocks, which are shares in companies believed to be undervalued by the market. While growth stocks are expected to increase in value due to their potential for rapid growth, value stocks are expected to gain value as the market recognizes their intrinsic worth.
What are the risks associated with growth stocks?
- Volatility: Growth stocks can be more volatile than the broader market.
- Higher valuations: Higher P/E ratios can make these stocks more susceptible to price corrections.
- Market sentiment: Investor sentiment can greatly affect growth stock prices, sometimes leading to overvaluation or rapid declines.
How do growth stocks perform in different market conditions?
- Bull markets: Growth stocks tend to perform well as investor confidence is high and economic conditions are favorable.
- Bear markets: These stocks can be more vulnerable to downturns as high valuations and speculative investments are often the first to be sold off.
Do growth stocks pay dividends?
Most growth stocks do not pay significant dividends, as they prefer to reinvest earnings into the company to fund further growth. Investors in growth stocks typically seek capital appreciation rather than income from dividends.
Can I invest in growth stocks through mutual funds or ETFs?
Yes, there are many mutual funds and ETFs that focus specifically on growth stocks. These can provide diversified exposure to a range of growth companies and reduce individual stock risk.