Scoop up These 3 GARP Stocks to Receive Handsome Returns

If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, try the growth at a reasonable price or GARP strategy.The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best value and growth investing. Cencora, Inc. COR, Raymond James Financial RJF and Cintas Corporation CTAS are some GARP stocks that hold promise.GARP Metrics — Mix of Growth & Value MetricsThe GARP strategy seeks to offer an ideal investment by utilizing the best features of value and growth investing. Investors adopting the GARP approach prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.Growth MetricsA strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. Hence, growth rates between 10% and 20% are considered ideal under the GARP strategy.Another metric that growth and GARP investors consider is the return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Stocks with positive cash flows find precedence under the GARP plan.Value MetricsGARP investing prioritizes the popular value metrics — the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios.Using the GARP principle, we ran a screen to identify stocks that should offer solid returns in the near term.Screening ParametersAlong with the criteria discussed in the above section, we have considered a Zacks Rank #1 (Strong Buy) or 2 (Buy).Last 5-year EPS & projected 3-5-year EPS growth rates between 10% and 20% (Strong EPS growth history and prospects ensure improving business.)ROE (over the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)P/E and P/B ratios less than the M-industry average (P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued.)Here are three of the five stocks that made it through the screening process:Cencora is one of the world’s largest pharmaceutical service companies. It focuses on providing drug distribution and related services to reduce healthcare costs and improve patient outcomes. The company is well-positioned to deliver long-term sustainable growth on the back of its diverse and inclusive teams.This Zacks Rank #2 company is an ideal partner for manufacturers looking to launch products. This is due to its extensive worldwide distribution network and global platform of commercialization services. Thanks to its growing presence in the pharmaceutical industry, Cencora can establish partnerships with pharmaceutical companies at an early stage of product development and market itself as an integrated partner capable of assisting in the successful commercialization of its products (in addition to providing logistics and distribution services). These factors are likely to have favored the stock’s growth. You can see the complete list of today's Zacks #1 Rank stocks here. Cencora has gained 19.3% in the year-to-date period. It has a trailing four-quarter earnings surprise of 6.97%, on average. The Zacks Consensus Estimate for COR’s fiscal 2025 earnings has moved north by 1% to $14.9 per share over the past 30 days.Raymond James Financial provides financial services mainly in the United States and Canada. Acquisitions, which enhance the company’s product offerings, diversify revenues and expand its footprint, are expected to continue bolstering the top line. Our estimate for net revenues implies seeing a CAGR of 6.9% by fiscal 2026. This Zacks Rank #2 company's solid liquidity position will likely keep its capital distribution activities sustainable.The majority of Raymond James’ businesses have been performing relatively well amid stiff competition. The PCG segment is one of the key contributors to revenue growth. Net revenues in the segment reflected a compound annual growth rate (CAGR) of 15.9% over the last three fiscal years ended 2023. The uptrend continued in the first nine months of fiscal 2024. Raymond James Financial has gained 48.1% in the year-to-date period. It has a trailing four-quarter earnings surprise of 7.78%, on average. The Zacks Consensus Estimate for RJF’s fiscal 2025 earnings has moved north by 5.2% to $10.83 per share over the past 30 days.Cintas provides specialized services to businesses of all types throughout North America. It also operates in Europe, Asia and Latin America. This Zacks Rank #2 company designs, manufactures and implements corporate identity uniform programs, and provides entrance mats, restroom supplies, promotional products, and first aid and safety products for diversified businesses.Cintas has been experiencing strength in its Uniform Rental and Facility Services segment, driven by growth in its customer base and the introduction of additional products and services to existing customers. The company’s focus on strengthening its product portfolio, along with investments in technology and existing facilities, should continue to drive its performance. Also, its focus on operational executions and pricing actions is helping it maintain a healthy margin. The company is focused on acquiring businesses to access new customers and product lines. CTAS’ acquisition of Paris Uniform Services (in March 2024) boosted its presence in Pennsylvania, New York, Maryland and West Virginia. Also, the buyout of SITEX (in February 2024) strengthened its market position in the central Midwest region.Cintas has gained 47.2% in the year-to-date period. It has a trailing four-quarter earnings surprise of 6.65%, on average. The Zacks Consensus Estimate for CTAS’s fiscal 2025 earnings has been unchanged at $4.23 per share over the past 30 days.Get the remaining stocks on the list and start testing this and other ideas. It can all be done with the Research Wizard stock picking and back-testing software.The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.Click here to sign up for a free trial of the Research Wizard today.Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.Disclosure: Performance information for Zacks' portfolios and strategies are available at: https://www.zacks.com/performance.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cintas Corporation (CTAS): Free Stock Analysis Report Cencora, Inc. (COR): Free Stock Analysis Report Raymond James Financial, Inc. (RJF): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks