Growth Stocks
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.
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GOODYEAR TIRE & RUBBER CO. $32.49 (Nasdaq symbol GT; TSINetwork Rating: Extra Risk) (330-796-2122; www.goodyear.com; Shares outstanding: 269.4 million; Market cap: $8.8 billion; Dividend yield: 0.9%) is the world’s largest tire maker, with 50 plants in 22 countries.
In the three months ended June 30, 2015, Goodyear’s revenue fell 10.4%, to $4.17 billion from $4.66 billion a year earlier. The rising U.S. dollar lowered the value of the company’s foreign sales (particularly in Europe and Brazil) by $401 million. Earnings rose 1.8%, to $229.0 million, or $0.84 a share, from $225.0 million, or $0.80 a share.
Goodyear will likely report profits of $3.10 a share this year, and it trades at just 10.5 times that estimate. Earnings should jump 21%, to $3.75, in 2016, and the stock trades at only 8.7 times that forecast.
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In the three months ended June 30, 2015, Goodyear’s revenue fell 10.4%, to $4.17 billion from $4.66 billion a year earlier. The rising U.S. dollar lowered the value of the company’s foreign sales (particularly in Europe and Brazil) by $401 million. Earnings rose 1.8%, to $229.0 million, or $0.84 a share, from $225.0 million, or $0.80 a share.
Goodyear will likely report profits of $3.10 a share this year, and it trades at just 10.5 times that estimate. Earnings should jump 21%, to $3.75, in 2016, and the stock trades at only 8.7 times that forecast.
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A history of consumer loyalty, big store upgrade initiatives and smart acquisitions keep Canadian Tire among our favourite dividend stocks
: Building on strategic acquisitions and a strong financial position, we see Metro Inc. as a top growth stock among Canada’s consumer giants.
Heavy equipment dealer Toromont Industries is profiting as strength in construction and power markets offsets weaker demand in mining.
As more automakers pre-install satellite radio, Sirius XM Canada should profit. Here’s our take on this high-yielding growth stock.
AMERICAN EXPRESS CO. $76 (www.americanexpress.com) is finding new retail partners to help offset the upcoming expiry of its deal with Costco’s U.S. stores, under which the chain only accepts American Express credit cards. For example, Wal-Mart’s Sam’s Club subsidiary recently agreed to accept Amex’s cards at its 650 warehouse stores in the U.S....
MOTOROLA SOLUTIONS INC. $68 (www.motorolasolutions.com) has completed its offer to buy back $2.0 billion worth of its shares. Under the plan, it repurchased 30.1 million shares, or 14.5% of the total outstanding, for $66.50 each. Buybacks raise earnings per share and other per-share calculations and give the remaining shareholders a larger stake in the company....
CEDAR FAIR L.P. $53 (New York symbol FUN; Income Portfolio, Consumer sector; Units outstanding: 56.0 million; Market cap: $3.0 billion; Price-to-sales ratio: 2.6; Dividend yield: 5.7%; TSINetwork Rating: Average; www.cedarfair.com) began operating in 1987 and is now one the world’s largest amusement park operators. Its parks attracted more than 23.3 million visitors in 2014.
Its flagship park is Cedar Point, in Sandusky, Ohio, which was first developed as a recreational area in 1870. Other major parks include Knott’s Berry Farm near Los Angeles, Kings Island in Cincinnati, Dorney Park in Pennsylvania and Adventure in central Michigan. In 2006, Cedar Fair expanded outside the U.S. for the first time when it purchased Canada’s Wonderland near Toronto.
In all, it owns 11 amusement parks, three outdoor water parks, one indoor water park and five hotels.
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Its flagship park is Cedar Point, in Sandusky, Ohio, which was first developed as a recreational area in 1870. Other major parks include Knott’s Berry Farm near Los Angeles, Kings Island in Cincinnati, Dorney Park in Pennsylvania and Adventure in central Michigan. In 2006, Cedar Fair expanded outside the U.S. for the first time when it purchased Canada’s Wonderland near Toronto.
In all, it owns 11 amusement parks, three outdoor water parks, one indoor water park and five hotels.
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MOLSON COORS BREWING CO. $83 (New York symbol TAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 185.0 million; Market cap: $15.4 billion; Price-to-sales ratio: 4.0; Dividend yield: 2.0%; TSINetwork Rating: Average; www.molson coors.com) jumped 20% in response to Anheuser-Busch InBev’s offer to buy rival brewer SABMiller plc.
In 2008, Molson Coors merged its U.S. brewing operations with those of SABMiller to form MillerCoors. Each company has a 50% voting interest in this joint venture, but SABMiller gets 58% of the profits, while Molson Coors gets 42%.
To satisfy competition regulators, a combined Anheuser-Busch InBev and SABMiller would probably have to sell its stake in the MillerCoors joint venture.
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In 2008, Molson Coors merged its U.S. brewing operations with those of SABMiller to form MillerCoors. Each company has a 50% voting interest in this joint venture, but SABMiller gets 58% of the profits, while Molson Coors gets 42%.
To satisfy competition regulators, a combined Anheuser-Busch InBev and SABMiller would probably have to sell its stake in the MillerCoors joint venture.
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