Best Growth Stocks to Buy Now in Top Sectors for 2018
Sam Subramanian PhD, MBA
If you are looking for the best growth stocks to buy now, this list of stodgy stalwarts from top sectors is worth checking. For one, all of them have strong near-term growth prospects. Second, some of them provide meaty dividends as well.
Stocks are soaring in 2018.
The DJIA and the S&P 500 have raced past 25,000 and 2,700, respectively.
The S&P 500 is already up 3.6%.
Stocks of commodity-related and economically-sensitive companies are leading the market.
Energy and technology stocks are up 6.2% and 4.7%, respectively.
Analysts are busy upping earnings expectations after President Trump signed the Tax Cuts and Jobs Act into law in late December.
This bill reduces the corporate tax rate from 35% to 21%.
The size and direction of the impact, however, vary by company.
Analysts expect companies in the financial sector to benefit the most from the tax cut.
According to FactSet, they have raised 2018 EPS estimates by 8.3% for companies in the financial sector, higher than any other sector.
Benefit from tax cuts is only one part of a sector's story. Other factors also play a part in sector-level EPS growth estimates.
So, which sectors do analysts expect to show the highest growth in 2018?
High Growth Sectors for 2018
Here is what FactSet data show:
Analysts are forecasting S&P 500 companies to grow earnings by 14.7% in 2018.
Earnings are expected to grow in all 11 sectors.
Earnings growth is expected to be strongest in the energy and financial sectors.
Earnings growth is expected to be less robust in interest-rate sensitive sectors like utilities and telecom services.
The best sector from an earnings growth perspective in 2018 is energy. Sector heavy-weights Exxon Mobil, Chevron, and Schlumberger along with a host of smaller companies are expected to show strong growth in earnings.
So, where can you find companies with above-average earnings growth prospects?
Best Growth Stocks to Buy Now
The following is a compilation of large U. S. companies forecasted to grow their EPS at a rate higher than the 14.7% rate for the S&P 500 index.
The list has been pruned to three companies in sectors with several companies showing above-average growth.
1. Best Growth Stocks to Buy Now in Consumer Discretionary Sector
- Amazon (AMZN): 84%
- Home Depot (HD): 17%
- Nike (NKE): 16%
2. Best Growth Stocks to Buy Now in Consumer Staples Sector
- Monster Beverage (MNST): 20%
3. Best Growth Stocks to Buy Now in Energy Sector
- Exxon Mobil (XOM): 17%
- Chevron (CVX): 35%
- Schlumberger (SLB): 50%
4. Best Growth Stocks to Buy Now in Financial Sector
- Bank of America (BAC): 31%
- Berkshire Hathaway (BRK/A): 39%
- Citigroup (C): 18%
5. Best Growth Stocks to Buy Now in Health Care Sector
- AbbVie (ABBV): 17%
- Celgene (CELG): 19%
- Cigna (CI): 17%
6. Best Growth Stocks to Buy Now Stocks in Industrial Sector
- United Parcel Service (UPS): 17%
- Union Pacific (UNP): 24%
- Caterpillar (CAT): 25%
7. Best Growth Stocks to Buy Now in Information Technology Sector
- Alphabet (GOOGL): 29%
- Visa (V): 16%
- Mastercard (MA): 19%
8. Best Growth Stocks to Buy Now in Materials Sector
- Sherwin-Williams (SHW): 25%
- Southern Copper (SCCO): 24%
- Freeport McMoran Copper & Gold (FCX): 50%
9. Best Growth Stocks to Buy Now in Real Estate Sector
- American Tower (AMT): 23%
- Crown Castle International (CCI): 15%
- Equinix (EQIX): 86%
10. Best Growth Stocks to Buy Now in Telecommunication Services Sector
11. Best Growth Stocks to Buy Now in Utilities Sector
AlphaProfit's Investment Selection Process
Selection of sectors with strong earnings growth prospects by itself does not guarantee winning picks.
To increase the odds of selecting winning sector ETFs & selecting winning Fidelity Select Funds, AlphaProfit evaluates sectors on valuation, momentum, and news quality with earnings growth being one of the news quality metrics.
This multi-factor analysis ensures investments in the chosen sector are attractively priced and have the catalysts needed to sustain growth in future.
Fully 75% of investments selected by AlphaProfit have made money ... and this includes the 2008 financial crisis and the dot-com bust at the turn of the millennium.
The high percentage of winning investment selections translates into lower risk and higher return for AlphaProfit Premium Service investment newsletter subscribers.
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Compounding at an annual rate of 18.4%, a dollar invested in AlphaProfit's selection process in 1994 is now worth $62.07 while a comparable investment in the S&P 500 is worth just $9.11.
Consistent selection of winning mutual fund picks has enabled AlphaProfit's Premium Service to rank #1 in Hulbert Financial's investment newsletter rankings multiple times.
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