Growth Stocks

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.

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Growth Stocks Library Archives

Growth Stocks

McKesson split should boost gains

MCKESSON CORP. $714 is a buy. The wholesale drug distributor (New York symbol MCK; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 125.1 million; Market cap: $89.3 billion; Price-to-sales ratio: 0.3; Dividend yield: 0.4%; TSINetwork Rating: Above Average; www.mckesson.com) plans to spin off its medical-surgical division as a publicly traded company. This business distributes surgical supplies, such as gloves, needles and laboratory equipment, to over 340,000 hospitals, doctors’ offices and clinics in the U.S. It accounts for 3% of the company’s total revenue.

McKesson has not yet announced the terms, but will probably complete the transaction in 2026.

1 min read

Pat McKeough

Growth Stocks

Global operations help offset tariff impact

New U.S. tariffs and its trade disputes with other countries are adding to costs for these medical lab equipment makers. However, their global manufacturing operations should let them adjust their supply chains to minimize the impact of tariffs.

2 min read

Pat McKeough

Growth Stocks

AI gives these software makers an edge

Both of these software makers continue to earmark large sums to the development of new products, particularly artificial intelligence. That should help them maintain their market leadership. What’s more, each stock is trading at attractive multiples to earnings.

2 min read

Pat McKeough

Growth Stocks

Yum aims to cut costs in India

YUM! BRANDS INC. $148 is a buy. The fast-food giant (New York symbol YUM; Aggressive Growth Portfolio, Consumer Sector; Shares outstanding: 278.0 million; Market cap: $41.1 billion; Price-to-sales ratio: 5.5; Dividend yield: 1.9%; TSINetwork Rating: Average; www.yum.com) operates 61,000 restaurants in over 155 countries. Its main banners are KFC (fried chicken), Pizza Hut, and Taco Bell (Mexican food) .

Yum is reportedly urging its two main franchisees in India to merge. Fast-food sales in India have slowed due to rising prices and economic uncertainty, so a merger would let these franchisees close overlapping outlets and improve efficiency.

1 min read

Pat McKeough

Growth Stocks

These spinoffs still have long-term appeal

Spinoffs are a great way for companies to unlock hidden value. However, the newly independent firms tend to move sideways for the first few years until they build up a history of earnings and gain a following with investors.

Here are three recent spinoffs with strong long-term prospects. (Subscribe to our Spinoffs and Takeovers newsletter for more quality spinoffs.) For now, however, we see better opportunities for your new buying.

5 min read

Pat McKeough

Growth Stocks

Cintas: A quiet superstar

Cintas’s shares have soared over 200% in the past five years. That’s mainly due to stronger demand from businesses for its uniforms as the economy rebounded from the COVID-19 lockdowns.

Going forward, the impact of tariffs could slow the hiring of new workers by businesses, which would hurt Cintas’s growth. However, the company continues to add more clients through acquisitions of smaller competitors. It’s also getting those new customers to buy more of its services.

Even after its big jump, we feel Cintas can continue to move higher over the next few years as its strong focus on efficiency further lifts earnings.

4 min read

Pat McKeough

Growth Stocks

We see these U.S. growth stocks as buys

Both of these firms are profitable and are well positioned to keep prospering. Trends underway as well as the strong position of each firm in its key markets will power future gains. Both of these leaders are buys.

2 min read

Pat McKeough

Growth Stocks

Warner Music deal will expand its revenue potential

Warner Music is now laying off an unspecified number of employees as part of a restructuring plan to cut costs. It already laid off 600 employees, or 10% of its workforce in 2024. Meanwhile, the company and global private investment firm Bain Capital are launching a joint venture for the purchase of up to $1.2 billion in music catalogues across both recorded music and music publishing.

1 min read

Pat McKeough

Growth Stocks

Buy these two leaders for high-tech gains

PagerDuty and Twilio were well positioned to gain during the pandemic, but since early 2021 they have dropped along with many other tech/platform stocks. Still, we think both have room to rebound as they continue to experience strong and growing demand. Both are buys.

2 min read

Pat McKeough

Growth Stocks

We see limited prospects here: Rent The Runway

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:

1 min read

Pat McKeough

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Inner Circle Pro subscriber

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Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.