5 Top Stocks to Buy for Superb Earnings Growth in 2024

As we head into the presidential election year, geopolitical issues and stretched valuations may create gyrations in the stock market. On the other hand, the possibility of multiple interest cuts might help the economy stay afloat. So, whatever the outcome of the stock market in 2024, from an investment standpoint, investing in companies exhibiting solid earnings growth should be the highest priority. This is because if the company doesn’t make money, it won’t last long.

So, what is earnings growth? Study a company’s revenues over a given period, subtract the production cost, and you have earnings. By the way, this is also considered the most important variable influencing share price. But, expectations of earnings play a noteworthy role.

Earnings Estimates & Share Price Movements

Frequently, we have seen a decline in the stock price despite earnings growth and a rally in price following an earnings decline. This is largely the result of a company’s earnings failing to meet market expectations.

Earnings estimates embody analysts’ opinions on factors such as sales growth, product demand, competitive industry environment, profit margins, and cost control. Thus, earnings estimates serve as a valuable tool, while making investment decisions. Earnings estimates also help analysts assess the cash flow to determine the fair value of a firm.

Thus, investors should look for stocks ready to make a big move. Hence, investors need to buy stocks with historical earnings growth and are seeing a rise in quarterly and annual earnings estimates.

Screening Measures:

To shortlist stocks that have striking earnings growth and positive estimate revisions, we have added the following parameters:

Zacks Rank less than or equal to 2 (Only Zacks' 'Buys' and 'Strong Buys' are allowed. With the Zacks Rank proving itself to be one of the best rating systems out there, this is a great way to start things off.)

5-Year Historical EPS Growth (%) greater than X-Industry (stocks with a strong EPS growth history).

% Change EPS F(0)/F(-1) greater than or equal to 5 (companies that saw year-over-year earnings growth of 5% or more in the last reported fiscal).

% Change Q1 Estimates over the last 4 weeks greater than zero (stocks that have seen their current quarter earnings estimates revised higher in the last 4 weeks).

% Change F1 Estimates over the last 1 week greater than zero (stocks that have seen their annual earnings estimates revised higher in the last 1 week).

% Change F1 Estimates over the last 4 weeks greater than zero (stocks that have seen their annual earnings estimates revised higher in the last 4 weeks).

The above criteria narrowed the universe of around 7,839 stocks to only six. Here are the top five stocks that stand out:

Beacon Roofing Supply BECN is the largest publicly traded distributor of residential and non-residential roofing materials and complementary building products in the United States and Canada. BECN’s expected earnings growth rate for the next year is 7.1%. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Deckers Outdoor DECK is a leading designer, producer and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities. DECK’s expected earnings growth rate for next year is 13.2%. The company currently has a Zacks Rank #1.

A. O. Smith AOS is one of the leading manufacturers of commercial and residential water heating equipment and water treatment products in the world. AOS’ expected earnings growth rate for next year is 5.8%. The company carries a Zacks Rank #2 (Buy) at present.

Assurant AIZ is a global provider of risk management solutions in the housing and lifestyle markets. The company has a Zacks Rank #1. AIZ’s expected earnings growth rate for next year is 4.2%.

Tradeweb Markets TW is an operator of electronic marketplaces for the trading of products across the rates, credit, money markets, and equities asset classes. The company has a Zacks Rank #1. TW’s expected earnings growth rate for next year is 16.4%.

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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 Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>

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A. O. Smith Corporation (AOS) : Free Stock Analysis Report

Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report

Assurant, Inc. (AIZ) : Free Stock Analysis Report

Beacon Roofing Supply, Inc. (BECN) : Free Stock Analysis Report

Tradeweb Markets Inc. (TW) : Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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