Chicago, IL – May 23, 2025 – Stocks in this week’s article are GE Aerospace GE, Brinker International EAT, Arista Networks, Inc. ANET and National Fuel Gas Co. NFG.
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 of value and growth investing. GE Aerospace, Brinker International, Arista Networks, Inc. and National Fuel Gas Co. are some GARP stocks that hold promise.
The 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 Metrics
A 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.
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Powered by Money.com - Yahoo may earn commission from the links above. Another metric that growth and GARP investors consider is 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 Metrics
GARP 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.
Here are four stocks from the eight that made it through the screening process:
GE Aerospace is a leading designer, developer and producer of jet engines, components and integrated systems for military, commercial and business aircraft. The company is well-known for its aero-derivative gas turbines for marine applications.
GE Aerospace has been witnessing strength in its businesses, driven by robust demand for commercial engines, propulsion and additive technologies. Rising U.S. & international defense budgets, geopolitical tensions, positive airline & airframer dynamics and robust demand for commercial air travel augur well for the company. Its portfolio-reshaping actions are likely to unlock value for its shareholders. The company raised its dividend by 28.6% to 36 cents per share in February 2025.
This Zacks Rank #2 stock has surged 40% in the year-to-date period. It has a trailing four-quarter earnings surprise of 17.97%, on average. The Zacks Consensus Estimate for GE's 2025 earnings has moved north by 1.7% to $5.50 per share over the past 30 days. You can see the complete list of today's Zacks #1 Rank stocks here.
Brinker International owns, operates, develops and franchises various restaurants under Chili's Grill & Bar (Chili's) and Maggiano's Little Italy (Maggiano's) brands. The company is benefiting from an increase in traffic, thanks to sales-building initiatives such as streamlining the menu, innovation, strengthening its value proposition, and improving food presentation. Advertising campaigns, kitchen system optimization and the introduction of a better service platform are key catalysts in driving top-line growth in the near term.
Brinker's digitalization initiatives, including improved order management systems, are expected to streamline operations and enhance customer experience in the near term. This and the emphasis on social media campaigns targeting younger demographics are anticipated to boost guest check and comps growth in the rest of 2025.
This Zacks Rank #2 stock has gained 8.8% in the year-to-date period. It has a trailing four-quarter earnings surprise of 24.52%, on average. The Zacks Consensus Estimate for EAT's fiscal 2025 earnings has moved north by 5.2% over the past 30 days to $8.76 per share.
Arista Networks is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Arista is benefiting from positive demand trends owing to its strong product portfolio, which is highly scalable and programmable and provides data-driven automation, analytics and support services. Its cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration. The growing demand for 200- and 400-gig high-performance switching products augurs well for long-term growth. Improved supply chain management is a positive.
This Zacks Rank #2 stock has declined 16.4% in the year-to-date period. It has a trailing four-quarter earnings surprise of 11.82%, on average. The Zacks Consensus Estimate for ANET's 2025 earnings has moved north by 3.6% to $2.56 per share over the past 30 days.
National Fuel Gas Company is an integrated energy company with natural gas assets located in the prolific Appalachian basin and oil-producing assets in California. The company operates through the following segments, namely Exploration and Production and Other, Pipeline and Storage and Gathering, and Utility and Energy Marketing.
National Fuel Gas' systematic investments should strengthen its operations and reduce greenhouse gas emissions. Strong liquidity should allow it to meet debt obligations. The company's steady process of replacing and modernizing the existing pipelines should further boost earnings. The company also acquired Shell's assets, which should further boost its top-line performance.
This Zacks Rank #2 stock has surged 34% in the year-to-date period. It has a trailing four-quarter earnings surprise of 3.94%, on average.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2476051/scoop-up-these-4-garp-stocks-to-receive-handsome-returns
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GE Aerospace (GE) : Free Stock Analysis Report
Brinker International, Inc. (EAT) : Free Stock Analysis Report
National Fuel Gas Company (NFG) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
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