December Growth Stocks

Growth investors are attracted to growing companies, of course. They differ from value investors who focus on valuation rations, or from dividend investors who seek high yielding dividend-paying companies. Instead, growth investors focus on things such as sales growth and earnings growth. Dividend growth is important to them as well, as companies able to increase their dividends are more likely to be in a good cash flow position.

Growth investors also keep an eye on metrics such as capital spending and total debt growth rates. For instance, companies increasing their capital budgets year over year sometimes have more potential than those who are decreasing their budgets. On the other hand, companies with too high of a debt load may find themselves in a cash crunch when that debt comes due or have trouble making interest rate payments if rates rise.

Knowing these five key metrics is essential to the growth investor, so we put all S&P/TSX Composite Index stocks in one list (PDF or Excel) for you to download. Below is a sample of the Communication Services sector:

You can use this information to research questions such as:

• Is earnings growth outpacing sales growth, or vice versa, and why?

• Is the company increasing dividends faster than earnings, and is this sustainable?

• If a company has increased capital spending more than its peers, are there any specific projects in the pipeline or is it just maintenance?

• Is the company operating near its target debt-equity ratio and if not, does management have a plan to return to more normal levels soon?

If you’d like this information for all S&P/TSX Composite Index stocks, please subscribe and then visit our Subscribers Area section where you’ll find this report, as well as many other fundamental and technical reports, available to download for free.

Happy Investing!