Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.
Although growth stock picks can be highly volatile, they can make good long-term investments. They may be well-known stars or quiet gems, but they do share one common attribute—they are growing at a higher-than-average rate within their industry, or within the market as a whole, and could keep growing for years or decades.
And keep in mind that we focus on growth stocks, which have a good long-term history and favourable prospects. We downplay momentum stocks that tend to attract many investors simply because they are moving faster than the market averages, but are liable to fall sharply when their momentum fades.
There’s room for growth stock investing in your portfolio, but make sure you follow our TSI Network three-part Successful Investor strategy for your overall portfolio:
Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.
Make better stock picks when you read this FREE Special Report, Canadian Growth Stocks: WestJet Stock, RioCan Stock and More.
MOTOROLA SOLUTIONS INC. $325 is a buy. The maker of two-way radios and high-definition surveillance systems (New York symbol MSI; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 166.1 million; Market cap: $54.0 billion; Price-to-sales ratio: 5.6; Dividend yield: 1.2%; TSINetwork Rating: Average; www.motorolasolutions.com) tends to… Read More
These two chipmakers are investing heavily in new plants. While these outlays will depress their earnings in 2024, the spending also puts them in a better position to fuel their long-term growth.
INTEL CORP. $43 is a buy. The company (Nasdaq symbol INTC; Conservative Growth Portfolio,… Read More
APPLE INC. $182 is still a hold. The company (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 15.6 billion; Market cap: $2.8 trillion; Price-to-sales ratio: 7.4; Dividend yield: 0.5%; TSINetwork Rating: Average; www.apple.com) gets about half of its revenue from iPhone sales. The other… Read More
DIAGEO PLC ADR $151 is a hold. The company (New York symbol DEO; Conservative Growth Portfolio, Consumer sector; ADRs outstanding: 562.5 million; Market cap: $84.9 billion; Price-to-sales ratio: 3.6; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.diageo.com) is a leading maker of premium alcoholic beverages.
INTERNATIONAL FLAVORS & FRAGRANCES INC. $77 remains a buy for long-term gains. The company (New York symbol IFF; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 255.3 million; Market cap: $19.7 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.iff.com) makes compounds that improve the taste… Read More
The pandemic presented both of these firms with unique challenges. However, each remained profitable and is well positioned to keep prospering as the economy rebounds. Trends now underway—as well as the strong position of these firms in key markets—will power their gains. Both are buys.
STERIS… Read More
Boston Scientific continues to add to its portfolio of medical devices used in minimally invasive procedures. The latest purchase lets it move into a new area, and bodes well for the stock’s outlook. We still see Boston Scientific as an attractive buy.
BOSTON SCIENTIFIC, $65.95, is… Read More
Long-time readers know that we aim to keep you informed of important news about the stocks we cover. That means highlighting developments and plans that promise to bolster investor gains. These buys that stand out this month:
MERCK & CO. INC., $125.82, is a buy. The drugmaker… Read More
Gen Digital and Warner Music soared during the pandemic but have now given up some of those gains. We still like their competitive prospects in their niche markets, and each stock is especially attractive for new buying right now.
GEN DIGITAL INC., $21.20, is a buy. The… Read More
You should remain wary of stocks that attract broker/media attention because of high-profile products or services and their business models. Here’s a closer look at one stock with risks that prospective investors should take into consideration:
CANADIAN SOLAR INC., $23.21, (Toronto symbol AD.UN; TSI Rating: Extra Risk) (Shares… Read More
With the outbreak of COVID-19, shares of Chipotle and Restaurant Brands dropped alongside the market. But the two fast-food giants used smart strategies to support their businesses during the pandemic. Both are trading at all-time highs for our subscribers—and we think they still have further… Read More
PAGERDUTY INC., $24.54, is a buy. The company (New York symbol PD; TSINetwork Rating: Extra Risk) (www.pagerduty.com; Shares outstanding: 91.9 million; Market cap: $2.2 billion; No dividends paid) jumped recently on a report that the software maker is evaluating its options amid takeover interest from private equity firms… Read More
We think the healthcare industry will enjoy great success over the next decade. But due to the nature of the business, results will vary widely and unpredictably from one company to another. A volatile market like the one we expect for healthcare stocks will include… Read More
ADT INC., $6.78, is a buy. The company (New York symbol ADT; TSINetwork Rating: Extra Risk) (adt.com; Shares outstanding: 867.1 million; Market cap: $6.1 billion; Dividend yield: 3.2%) is a leading provider of monitored security products and services to customers in the U.S.
In December 2021, the company acquired… Read More
Shares of Fair Isaac have risen 84.8% for our subscribers over the last year—and a whopping 9,413.5% since we first recommended the stock in our February 1999 issue at $13.60 a share (split adjusted)! That said, we think the shares have room to move much higher.
The… Read More
FIRSTSERVICE CORP. $221 is a buy for aggressive investors. The company (Toronto symbol FSV; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 44.6 million; Market cap: $9.9 billion; Price-to-sales ratio: 1.7; Dividend yield: 0.6%; TSINetwork Rating: Extra Risk; www.firstservice.com) has two main businesses: FirstService Brands (54% of revenue)… Read More
CP Rail and Metro are leading competitors in their respective markets. You can expect that to lower your risk if the economy should weaken. We see both stocks as buys.
CANADIAN PACIFIC RAILWAY $108.19, is a buy. The company (Toronto symbol CP; shares o/s: 931.8 million; Market cap: $99.1… Read More
RESTAURANT BRANDS INTERNATIONAL INC. $76 (www.rbi.com) is a buy. The company is now buying Carrols Restaurant Group (Nasdaq symbol TAST), Burger King’s largest U.S. franchisee, for $1 billion. Restaurant Brands will also invest about $500 million to modernize 600 of Carrols’ 1,022 restaurants over the next five years… Read More
The shares of aerospace equipment maker RTX dropped to $69 in October 2023 after the company issued a recall of some defective jet engines. Despite that setback, the shares have rebounded on improving demand for RTX’s commercial and military products. Cost savings also let the… Read More
CEDAR FAIR L.P. $39 is still a hold. The partnership (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 51.0 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.1; Distribution yield: 3.1%; TSINetwork Rating: Average; www.cedarfair.com) has agreed to merge with rival amusement park operator Six Flags Entertainment… Read More
