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.
Businesses and markets have been roiled by the COVID-19 disease.
There are more than 400,000 confirmed COVID-19 cases worldwide as of March 24. The disease has claimed over 17,400 lives.
The World Health Organization has declared COVID-19 a pandemic, meaning the disease will inevitably spread to all parts of the world.
Measures to stop or slow down the spread of the disease have impacted consumer and business activities.
Economists forecast a recession. They expect unemployment in the U. S. to soar well into double-digits.
The Federal Reserve has taken several extraordinary measures to keep credit flowing in the U. S. and beyond.
The central bank has slashed interest rates, announced an open-ended asset purchase program, and improved liquidity in corporate debt & currency markets.
The Trump administration and Congress are working towards a $2 trillion stimulus package.
Meanwhile, COVID-19 has wiped out almost 32%, or roughly $9 trillion, off the S&P 500 benchmark from its February 19 record high.
The Russell 2000 index of small-cap companies is down 40% from its all-time high.
Analysts are chopping their 2020 corporate earnings growth forecasts as supply chains buckle, stores close, and travel demand falls off a cliff.
High Growth Sectors for 2020
Here is what FactSet data show as of March 20:
Analysts currently forecast S&P 500 companies to grow earnings by 2.5% in 2020.
That’s sharply down from the 9.2% growth they forecasted on December 31, 2019.
Defying speculation of a V-shaped recovery, analysts have lowered earnings growth forecasts for all four quarters of 2020.
They now expect aggregate earnings to fall 2.2% and 3.9% in the first and second quarters, respectively.
As shown below, analysts now expect earnings to grow year-over-year in 8 of the 11 sectors.
Earnings growth is expected to be strongest in the information technology, communication services, and healthcare sectors.
Earnings are expected to remain flat in consumer discretionary and decline in the industrial & energy sectors.
Stock valuation metrics are more reasonable after the sharp decline in stock prices.
The forward 12-month P/E ratio, a commonly used metric to value stocks, now stands at 13.9. This current forward P/E reading is lower than its 5-year and 10-year average by 17% and 7%, respectively.
In chaotic markets such as this one, the right stocks can deliver outsized rewards.
High growth sectors are a logical place to look for the best growth stocks to buy now. Companies with rapidly growing earnings also offer the added advantage of either initiating or growing their dividends.
So, what specific companies currently offer 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 2.5% rate for the S&P 500 index.
Companies with a market capitalization of over $25 billion are included in this list.
The list is pruned to three companies in sectors where several companies show above-average growth.
1. Best Growth Stocks to Buy Now in Communication Services Sector
• Charter Communications (CHTR): 88%
• Netflix (NFLX): 45%
• Facebook (FB): 40%
2. Best Growth Stocks to Buy Now in Consumer Discretionary Sector
• Amazon.com (AMZN): 25%
• Nike (NKE): 12%
• McDonald’s (MCD): 8%
3. Best Growth Stocks to Buy Now in Consumer Staples Sector
• Procter & Gamble (PG): 10%
• Costco Wholesale (COST): 6%
• Pepsi (PEP): 6%
4. Best Growth Stocks to Buy Now in Energy Sector
• Kinder Morgan (KMI): 6%
5. Best Growth Stocks to Buy Now in Financial Sector
• Goldman Sachs (GS): 12%
• CME Group (CME): 10%
• Bank of America (BAC): 5%
6. Best Growth Stocks to Buy Now in Health Care Sector
• Bristol-Myers Squibb (BMY): 33%
• Danaher (DHR): 23%
• Eli Lilly and Company (LLY): 12%
7. Best Growth Stocks to Buy Now Stocks in Industrial Sector
• Boeing (BA): 185%
• Lockheed Martin (LMT): 11%
• Union Pacific (UNP): 8%
8. Best Growth Stocks to Buy Now in Information Technology Sector
• NVIDIA (NVDA): 35%
• Adobe Systems (ADBE): 24%
• Microsoft (MSFT): 20%
9. Best Growth Stocks to Buy Now in Materials Sector
• Newmont Goldcorp (NEM): 53%
• Air Products & Chemicals (APD): 15%
• Linde PLC (LIN): 11%
10. Best Growth Stocks to Buy Now in Real Estate Sector
• Equinix (EQIX): 32%
• Crown Castle International (CCI): 23%
• American Tower (AMT): 6%
11. Best Growth Stocks to Buy Now in Utilities Sector
• NextEra Energy (NEE): 9%
• Dominion Energy (D): 4%
• Duke Energy (DUK): 4%
AlphaProfit’s Recommendations of Best Growth Stocks to Buy Now
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