The easiest way to identify growth stocks is to find companies that are expected to outperform the overall market because they’re backed by great, long-term potential. The growth stocks I plan to explore today have delivered massive growth in several important financial metrics like earnings-per-share (EPS), revenue, dividends, return on equity (ROE) and free cash flow. The good news for these companies is that experts expect them to continue delivering strong financial performance (and growth) amid current challenging economic conditions.
Buying growth stocks that are overvalued is not an ideal investment strategy. Finding stocks with massive growth means that in most cases they will rarely be cheap. However, these stocks have plenty of upside potential, that’s balanced with value.
Crescent Point Energy
Alpha Metallurgical Resources
Alliance Resource Partners
Turquoise Hill Resources
Star Bulk Carriers
Viper Energy Partners
Crescent Point Energy (CPG)
Crescent Point Energy (NYSE:CPG) produces light and medium crude oil, natural gas liquids and natural gas reserves in Western Canada and the United States.
This year has been a tough one so far for stocks, but the energy sector has been a clear winner. CPG stock has gained nearly 60% in 2022. It’s not just it’s role in a strong sector that’s worth mentioning. The CPG stock has a price-to-earnings ratio (TTM) of 1.89x and a forward dividend yield of 2.36%.
In 2021, its revenue grew 90.15%; meanwhile, its net income grew 193.82% and EBITDA soared 167.07%, according to MarketWatch data. Its forward revenue growth is 29%, the free cash flow per share growth rate (FWD) is expected to be 99% and operating cash flow growth (FWD) is anticipated to be 41%.
Higher energy prices should continue to have a positive impact on profitability throughout 2022.
Arch Resources (ARCH)
Arch Resources (NYSE:ARCH) is an energy company that sells thermal and metallurgical coal from surface and underground mines.
EBITDA, or earnings before interest, taxes, depreciation, and amortization, is an important measure of a company’s total financial performance. It’s also useful for valuation purposes. In 2021, Arch Resources delivered an EBITDA growth of 7,438.89% to $535.86 million. Its sales growth of 50.26% and net income growth of 197.96% in 2021 were also exceptional. Its EPS diluted growth also grew by 184.44%.
Its forward growth is also expected to be impressive. In fact, its EBITDA growth (FWD) is expected to be 230%, and operating cash flow growth (FWD) is forecasted to be 125.32% after year-over-year growth of 566.70%.
All these figures indicate tons of future expected growth.
Alpha Metallurgical Resources (AMR)
Alpha Metallurgical Resources (NYSE:AMR) is a mining company, that produces, processes and sells coal in Virginia and West Virginia.
When you have growth in more than just one key financial metric, you could have a clear winner and a stock that should do very well in the future like in the past. In 2021, Alpha Metallurgical Resources delivered sales growth of 59.48%, gross income growth of 1,161.25%, net income growth of 218.83% and finally massive free cash flow growth of 1,220.54%.
This growth has been phenomenal. Turning to forward expectations, the EBITDA Growth (FWD) is expected to be 104.70%.
Alliance Resource Partners (ARLP)
Alliance Resource Partners (NASDAQ:ARLP) is a diversified natural resource company, that produces and markets coal primarily to utilities and industrial users in the United States.
The shares of Alliance Resource Partners have been resilient in 2022 with gains of approximately 56%; its forward dividend yield is 7.05%.
In terms of growth, in 2021, Alliance Resource Partners reported EPS (diluted) growth of 234.17% with a figure of $1.36 EPS compared to an EPS loss of $1.02 in 2020.
Year-over-year, the growth in key metrics has been phenomenal for Alliance Resource Partners. EBITDA grew 39.14%, EBIT increased 228.20%, net income increased 371.49%.
Its 1-year dividend growth rate (TTM) was also very good, coming in at 800%. What about the forward growth? The EBIT Growth (FWD) is expected to be 117.28% and EPS Diluted Growth (FWD) is expected to continue to be very strong at 194.83%, according to data by SeekingAlpha.
Turquoise Hill Resources (TRQ)
Turquoise Hill Resources (NYSE:TRQ) is a mining company that primarily explores copper, gold and silver deposits.
Does growth in stock price also reflect growth in financial performance? In most cases, the answer is yes. But not always, as you’ll see with most overvalued growth technology stocks that plunged. However, Turquoise Hill Resources features great growth in several financial ratios and has climbed almost 80% this year.
In 2021, its revenue growth was 70.87%, gross income growth was 212.97% and EBITDA growth was 214.26%. Likewise, year-over-year its normalized net income grew 215.75%.
These impressive figures are supported by robust anticipated future growth. The EBIT Growth (FWD) is expected to be 43.69% and Operating Cash Flow Growth (FWD) is anticipated to be 147.52%.
Star Bulk Carriers (SBLK)
Star Bulk Carriers (NASDAQ:SBLK) is a shipping company that transports dry bulk cargoes worldwide. The firm also provides vessel management services.
SBLK stock offers a high forward dividend yield of 17.21% and trades at a P/E ratio (TTM) of 3.88x, according to Yahoo Finance data.
In 2021, sales growth was 106.23%, gross income growth surged 580.35% to $794.46 million and net income growth climbed 6,944.82% to $680.53 million. So what’s the factor for the company to have a sustainable high dividend? A strong positive free cash flow.
In 2020 and in 2021 the shipping company reported free cash flow growth of 132.65% and 606.79%, respectively.
Year-over-year, normalized net income grew by 1,548.20%. The EPS Diluted Growth (FWD) is expected to be 208.60% and ROE Growth (FWD) is anticipated to be 276.90%.
Viper Energy Partners (VNOM)
Viper Energy Partners (NASDAQ:VNOM) is a company that exploits oil and natural gas properties in North America.
Shares of Viper Energy Partners have gained 51% in 2022, so there must be a great story supporting this strong return — right? The story is its massive growth in multiple financial metrics.
It demonstrated impressive sales growth of 103.07% in 2021. Similarly, gross income growth was 189.01% and net income grew 130.22% that year.
There is more good news related to growth. The 1-year dividend growth rate (TTM) is 255.77%. Year-over-year, the Operation Income (EBIT) surged by 656.92% — that’s the definition of massive growth.
Overall, the growth prospects for VNOM look great. The EBIT growth (FWD) is expected to be 119.93% and EPS diluted growth (FWD) is anticipated at 88.40%. The dividend seems to be sustainable as the free cash flow per share growth rate (FWD) is expected to be 59.53%.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.