Growth stocks are good in order to lift up your portfolio worth. Only a growing business is a good business because the valuation of the company should rise if the growth doesn’t slowdown. But growth doesn’t create always values. To find the real growth, we need a second ratio like the return on investment. The return on investment (ROI) is a performance measure which is often used to evaluate the efficiency of an investment. The ratio is calculated as net gains from an investment divided by the costs of an investment.
I screened stocks with a growth in sales of more than 25 percent over the past five years. In addition, the dividend yield should be over 3 percent and the return on investment over 10 percent. 13 stocks fulfilled these criteria, of which 4 yielding above 10 percent. Here are my most promising results:
1. Williams Partners (WPZ) is acting within the specialty chemicals industry. The company has a market capitalization of $15.3 billion, generates revenues in an amount of $6.1 billion and a net income of $876.0 million. It follows P/E ratio is 17.0 and forward price to earnings ratio 14.3, Price/Sales 6.1 and Price/Book ratio 3.0. Dividend Yield: 5.6 percent. The return on investment amounts to 10.1 and the 5-year sales growth was 61.8 percent.
2. Main Street Capital Corporation (MAIN) is acting within the diversified investments industry. The company has a market capitalization of $407.2 million, generates revenues in an amount of $50.2 million and a net income of $48.8 million. Its P/E ratio is 7.1 and forward price to earnings ratio 10.8, Price/Sales 8.1 and Price/Book ratio 1.2. Dividend Yield: 9.2 percent. The return on investment amounts to 10.9 and the 5-year sales growth was 37.0 percent.
3. El Paso Pipeline Partners (EPB) is acting within the oil and gas pipelines industry. The company has a market capitalization of $7.5 billion, generates revenues in an amount of $1.7 billion and a net income of $349.5 million. Its P/E ratio is 18.0 and forward price to earnings ratio 14.7, Price/Sales 4.4 and Price/Book ratio 3.8. Dividend Yield: 5.4 percent. The return on investment amounts to 15.0 and the 5-year sales growth was 75.4 percent.
Take a closer look at the full table of 13 growth stocks with big returns. The average price to earnings ratio (P/E ratio) amounts to 10.5 while the average forward P/E ratio is 8.1. The dividend yield has an average value of 7.6 percent. Price to book ratio is 3.5 and price to sales ratio 2.0. The operating margin amounts to 14.3 percent.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.