4 Growth Stocks to Buy and Hold for Years to Come

With the Fed’s continued support of the economy with its accommodative monetary policy, inflation has been rising. The Consumer Price Index hit 5.4% in June, its highest monthly gain since 2008. Furthermore, due to a resurgence of COVID cases across the country also, the stock market remains highly volatile.

In response, investors are shifting their focus to quality growth stocks  to dodge short-term market fluctuations and benefit from businesses’ impressive growth. This is evidenced by SPDR Portfolio S&P 500 Growth ETF’s (SPYG) 10.7% returns over the past three months. Also, the Fed’s near-zero rate policy and the continued economic recovery bode well for growth stocks.

Amid rising uncertainties regarding the sustainability of the market’s momentum, we believe fundamentally strong growth stocks Danaher Corporation (DHR), Hologic Inc. (HOLX), Brunswick Corporation (BC), and Matson Inc. (MATX) could gain significantly this year and beyond. So, they could be solid picks now.

Danaher Corporation (DHR)

DHR is based in Washington, DC., the company develops, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. Life Sciences; Diagnostics; and Environmental & Applied Solutions are the company’s three operational segments.

Last month, DHR announced that it had agreed to acquire Aldevron for $9.6 billion in cash. Through this acquisition, the company intends to expand its operations into the field of genomic medicine to meet its goal of bringing more life-saving drugs and vaccines to market faster.

For the second quarter, ended July 2, 2021, DHR's sales rose 36.3% from its  year-ago value to $7.22 billion. Its operating profit increased 137.6% year-over-year to $2.01 billion, while its net income grew 95.5% from the prior-year quarter to $1.74. Its EPS surged 93.6% year-over-year to $2.40 over this period. Its revenue has increased at a 10.8% CAGR over the past five years, and its levered free cash flow has increased at a 23.5% CAGR over the past three years.

The company's EPS is expected to grow 40.7% year-over-year to $8.88 in the current year. In addition, analysts expect DHR's revenue to increase 24.5% in its fiscal year 2021. DHR's stock has gained 49.4% over the past year and 38.3% year-to-date.

DHR's POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

DHR is also rated an A grade for Sentiment, and a B for Growth, and Stability. Additionally, within the Medical - Devices & Equipment industry, it is ranked #42 of 188 stocks.

To see additional POWR Ratings for Value, Quality, and Momentum for DHR, click here.

Click here to checkout our Healthcare Sector Report for 2021

Hologic Inc. (HOLX)

HOLX develops, produces, and distributes diagnostics, medical imaging systems, and surgical devices worldwide. Diagnostics; Breast Health; GYN Surgical; and Skeletal Health are the company’s four segments. It markets its products through direct sales and service personnel, as well as independent distributors and sales agents. HOLX is based in Bedford, Mass.

In June, HOLX’s new Aptima CMV Quant assay obtained the CE mark in Europe. This test measures the viral load of human cytomegalovirus (CMV) and is designed to help diagnose and treat solid-organ transplant and hematopoietic stem cell transplant patients.

Also in June, HOLX announced the completion of its acquisition of Mobidiag Oy, a pioneer in near-patient, acute care molecular diagnostic testing, for an estimated  $808 million. The company aims to expand its global footprint and market leadership through this acquisition.

HOLX’s revenue increased 42% year-over-year to $1.17 billion in its third fiscal quarter ended June 26, 2021. Its operating profit grew 87.8% from its  year-ago value to $358.6 million. The company's net income increased 94.6% year-over-year to $268.4 million. In addition, its EPS increased 96.2% year-over-year to $1.04 over this period. Its revenue and EBITDA grew at 20.9% and 43.6% CAGRs, respectively, over the past three years.

The company’s EPS is expected to grow 91.2% year-over-year to $7.61 in its fiscal year 2021. Analysts expect HOLX’s revenue to increase 38.2% year-over-year to $5.22 billion in the current year. The stock has gained 8.1% over the past year and 10% over the past month.

HOLX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. HOLX also has an A grade for Value, and a B for Sentiment and Quality. The stock is ranked #53 of 188 stocks in the Medical - Devices & Equipment industry.

Beyond the POWR Ratings grades I have just highlighted, you can see the HOLX ratings for Growth, Stability, and Momentum.

Click here to checkout our Healthcare Sector Report for 2021

Brunswick Corporation (BC)

BC in Lake Forest, Ill., designs, manufactures, and markets recreational marine parts, such as marine propulsion, parts and accessories, boat brands, and operates service and shared access businesses, including its  boat club. Propulsion; Parts & Accessories; and Boat are the three segments through which the company operates.

Last month, BC’s subsidiary, Freedom Boat Club, acquired  Fanautic Club, one of Europe's largest boat clubs with 23 locations in key coastal cities and tourist hubs around Spain. The acquisition should  enable BC to expand its brand across Europe and accelerate its business growth.

During the second quarter, ended July 3, 2021, BC’s net sales increased 57.4% year-over-year to $1.55 billion. The company’s operating earnings increased 133.8% year-over-year to $250.2 billion. Its net income increased 153.8% year-over-year to $179.4 billion, while its EPS grew 157.3% from the prior-year quarter to $2.29. Its net income and EPS have increased at CAGRs of 72.2% and 91.4%, respectively, over the past three years.

A $7.69 consensus EPS estimate for the current year represents a 51.7% increase year-over-year. The $5.59 billion consensus revenue estimate for the current year represents a 28.5% increase from the same period last year. The stock has gained 60.6% over the past year and 36.7% year-to-date.

BC's POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. BC is also rated an A grade for Quality, and a B for Sentiment and Momentum. Within the A-rated Athletics & Recreation industry, it is ranked #9 of 35 stocks.

Click here to see additional POWR Ratings for Growth, Value, and Stability for BC.

Note that BC is one of the few stocks handpicked currently in the Reitmeister Total Return portfolio. Learn more here.

Matson Inc. (MATX)

MATX provides maritime transportation and logistics services through its subsidiaries. The Honolulu, Hawaii-based company offers its services to the U.S. military, freight forwarders, retailers, consumer goods, automobile manufacturers, and others. Ocean Transportation and Logistics are the company’s two business segments.

For the second quarter, ended June 30, 2021, MATX’s operating revenue increased 66.9% year-over-year to $874.9 million. Its operating profit grew 317.8% from its year-ago value to $213.9 million. The company's net income increased 395.4% year-over-year to $162.5 million. In addition, its EPS increased 388.2% year-over-year to $3.71 over this period. Its revenue and EBIT increased at CAGRs of 11.3% and 60.1%, respectively, over the past three years.

Analysts expect MATX's revenue to increase 26.2% year-over-year to $3.01 billion in its fiscal year 2021. The company's EPS is expected to grow 115.5% year-over-year to $9.57 in the current year. Also, the stock has surged 85.8% over the past year and 25% year-to-date.

It is no surprise that MATX has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has a B grade for Growth, Value, and Momentum. In the Shipping industry, it is ranked #2 of 48 stocks.

In addition to the POWR Ratings grades we have just highlighted, one can see the MATX ratings for Stability, Sentiment, and Quality here.

DHR shares rose $0.72 (+0.23%) in premarket trading Monday. Year-to-date, DHR has gained 38.89%, versus a 19.04% rise in the benchmark S&P 500 index during the same period.

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.

More...