In this article, we take a look at 16 high growth non-tech stocks that are profitable. If you want to see more high growth non-tech stocks that are profitable, go directly to 5 High Growth Non-Tech Stocks That Are Profitable.
High growth stocks can have various definitions. For this article, we define high growth as a company where analysts expect the company to grow its EPS by an average annual rate of at least 10% over the next 5 years.
High growth stocks can oftentimes be riskier than blue chip stocks because much of their value is in the future and depends on future growth. If high growth stocks’ growth rate slows more than expected, the market could value the perceived value in the future lower.
Although many high growth stocks are tech stocks, there are also many high growth stocks in other sectors that aren’t in technology.
Companies try to grow their earnings in various ways. Some companies buy back a lot of their stock to try to generate more EPS growth if their earnings are relatively stable. Other companies try to acquire the right companies for growth. Yet other companies try to expand organically by developing new products or services or expanding into new markets.
Sometimes those growth efforts work and sometimes they don’t. When they do work, some companies that are successful in making new profitable products, buying back their stock at the right times, and buying the right companies can grow their earnings faster than 10% a year.
The Economic Cycle
An average company’s growth rate can vary depending on where the economy is in the economic cycle. If the economy is strong and growing, the average EPS growth rate might be a little faster than if an economy is weak and potentially contracting.
In terms of where the economy is currently in the economic cycle, it isn’t clear where the economy is. Although unemployment is low and the economy is growing, the Federal Reserve is widely expected to continue to raise interest rates. If the central bank raises rates too much, there could be an economic slowdown.
In 2022, the growth of many high growth stocks in the technology sector slowed fairly considerably in part due to the rise in interest rates. The valuation of many big tech companies decreased as a result of capital moving from the equity market into the U.S. Treasury market given the interest rate increases.
Comparatively, many other non-tech sectors did a little better than the tech sector in 2022 because their valuations weren’t as high or weren’t as dependent on growth rates.
If the future increases in interest rates cause a recession or a substantial economic slowdown, however, the valuations in non tech sectors could also come under pressure. An economic slowdown or recession could negatively affect earnings growth rates of companies in both technology and non technology sectors. It could also affect the future expected earnings growth rates for the next 5 years as well.
As a result, it could be a good idea for long term investors to own a well diversified portfolio of leading stocks across many different sectors.
Methodology
For our list of 16 High Growth Non-Tech Stocks That Are Profitable, we selected 16 stocks with competitive advantages in sectors other than technology that have an EPS next 5 year ratio of over 10% according to FINVIZ.com.
EPS Next 5 Year Ratio is the estimated average annual EPS growth rate in the next 5 years.
Given EPS Next 5 Year Ratio is an estimate, it can change from time to time depending on economic events, company specific events, and analyst view changes.
We ranked the stocks based on their EPS next 5 year ratio according to FINVIZ.com.
We also included trailing twelve month net income data from YCharts.
Because we used net income data from YCharts, the net income data might not be adjusted and it could be over different time periods since different companies have different fiscal years.
For those of you interested, check out 10 High Growth Low Dividend Stocks to Buy.
16 High Growth Non-Tech Stocks That Are Profitable
16. NextEra Energy, Inc. (NYSE:NEE)
EPS Next 5 Year Ratio According to FINVIZ.com: 10.21%
Net Income (TTM) as of December 31, 2022: $4.147 billion
NextEra Energy, Inc. (NYSE:NEE) is a leading clean energy company that owns Florida Power & Light Company, which is America’s largest electric utility. Given its scale and potential, NextEra Energy, Inc. (NYSE:NEE) earned $4.147 billion in net income in 2022 and analysts expect the company to increase its earnings per share by an average of 10.21% a year over the next 5 years.
According to the company, NextEra Energy, Inc. (NYSE:NEE) has increased its adjusted earnings per share by a CAGR of around 8.3% from 2007 to 2022 so the estimate for the next 5 years might be a little higher than what the company has achieved historically. Nevertheless, NextEra Energy, Inc. (NYSE:NEE) is a leading producer of renewable energy whose demand is expected to increase in the future.
15. Blackstone Inc. (NYSE:BX)
EPS Next 5 Year Ratio According to FINVIZ.com: 10.34%
Net Income (TTM) as of December 31, 2022: $1.748 billion
Blackstone Inc. (NYSE:BX) is a leading private equity firm with AUM of $975 billion at the end of 2022, which gives it substantial scale and fees that affords it high relatively high margins. With its scale and high margins, Blackstone Inc. (NYSE:BX) had net income of $1.748 billion in 2022 according to YCharts. Although higher interest rates have been a headwind to earnings, analysts nevertheless expect EPS to rise from 2023. According to their estimates, analysts estimate the company will earn $4.83 per share in FY2023, $6.24 per share in FY2024, and $7.19 per share in FY2025. By comparison, analysts estimated the company earn $5.05 per share for FY2022. Blackstone Inc. (NYSE:BX) has a EPS Next 5 Year Ratio of 10.34%.
14. Costco Wholesale Corporation (NASDAQ:COST)
EPS Next 5 Year Ratio According to FINVIZ.com: 10.41%
Net Income (TTM) as of November 30, 2022: $5.884 billion
Costco Wholesale Corporation (NASDAQ:COST) had a trailing twelve month net income of $5.884 billion as of November 30, 2022, making it one of the most profitable retailers in the world. Given its growing store count, its organic growth, and other factors, Costco Wholesale Corporation (NASDAQ:COST) also has an EPS Next 5 Year Ratio of 10.41%, ranking the company #14 on our list of 16 High Growth Non-Tech Stocks That Are Profitable. Costco Wholesale Corporation (NASDAQ:COST) has a forward P/E ratio of 30.41 and a dividend yield of 0.74% as of 2/28.
13. PNC Financial Services Group, Inc. (NYSE:PNC)
EPS Next 5 Year Ratio According to FINVIZ.com: 10.96%
Net Income (TTM) as of December 31, 2022: $6.041 billion
Leading regional bank PNC Financial Services Group, Inc. (NYSE:PNC) had a net income of $6.041 billion for 2022 according to YCharts. For the full year, PNC Financial Services Group, Inc. (NYSE:PNC)’s revenue grew 10% year over year, the company’s net interest margin expanded significantly, and the company also returned $6 billion of capital to shareholders through share repurchases and common dividends. According to FINVIZ.com, PNC Financial Services Group, Inc. (NYSE:PNC) has an EPS Next 5 Year Ratio of 10.96% which could mean even more capital returns in the future.
12. Cintas Corporation (NASDAQ:CTAS)
EPS Next 5 Year Ratio According to FINVIZ.com: 12.21%
Net Income (TTM) as of November 30, 2022: $1.286 billion
Cintas Corporation (NASDAQ:CTAS) ranks #12 on our list of 16 High Growth Non-Tech Stocks That Are Profitable given analysts expect the leading uniform maker to increase its earnings per share by an average of 12.21% a year over the next 5 years. For the fiscal yer ended May 31, 2022, the company’s sales rose 10.4% year over year to $7.85 billion. For the trailing twelve months ended November 30, 2022, Cintas Corporation (NASDAQ:CTAS) had net income of $1.286 billion.
In July 2022, the company’s board increased the quarterly dividend by 21.1% to $1.15 per share and also authorized a stock buyback of up to $1 billion. If Cintas Corporation (NASDAQ:CTAS) continues to grow, the company could continue to return capital back to shareholders.
11. MSCI Inc. (NYSE:MSCI)
EPS Next 5 Year Ratio According to FINVIZ.com: 12.74%
Net Income (TTM) as of December 31, 2022: $870.57 million
MSCI Inc. (NYSE:MSCI) is a leading financial data company that has an EPS Next 5 Year Ratio of 12.74% and net income of $870.57 million for 2022. For full year 2022, MSCI Inc. (NYSE:MSCI) also repurchased $1.285 billion worth of shares and the company’s board of directors increased the dividend by 10.4% to $1.38 per share for the first quarter of 2023 as well.
For 2022, MSCI Inc. (NYSE:MSCI) CEO Henry A. Fernandez said, “Despite a global bear market and historically volatile market conditions, MSCI delivered strong performance for the year with Adjusted EPS growth of 15.1% and a record full year retention rate of 95.2%. Among other highlights, we achieved our ninth consecutive year of double-digit subscription run rate growth in Index. Meanwhile, our full-year Climate results across all product lines included 79.6% run rate growth and 97.8% retention rate. Climate remains a significant opportunity and area of keen focus for MSCI.”
10. S&P Global Inc. (NYSE:SPGI)
EPS Next 5 Year Ratio According to FINVIZ.com: 13.10%
Net Income (TTM) as of December 31, 2022: $3.248 billion
S&P Global Inc. (NYSE:SPGI) is another leading financial data company that’s profitable and expected to grow earnings in the future given its net income of $3.248 billion in 2022 and its EPS Next 5 Year Ratio of 13.10%. In Q4, S&P Global Inc. (NYSE:SPGI) reported adjusted EPS of $2.54 on sales of $2.94 billion versus the consensus of $2.48 on revenue of $2.88 billion. In January, S&P Global Inc. (NYSE:SPGI)’s board of directors also increased the quarterly dividend to $0.90 per share from the previous $0.85 per share. As of 3/1, S&P Global Inc. (NYSE:SPGI) has a dividend yield of 1.06%.
9. Automatic Data Processing (NASDAQ:ADP)
EPS Next 5 Year Ratio According to FINVIZ.com: 13.43%
Net Income (TTM) as of December 31, 2022: $3.146 billion
Automatic Data Processing (NASDAQ:ADP) is a leading payroll company that had net income of $3.146 billion in 2022. The company is growing and expected to continue to grow given its EPS Next 5 Year Ratio of 13.43%. For its second quarter, Automatic Data Processing (NASDAQ:ADP) reported adjusted EPS of $1.96 on sales of $4.4 billion versus the consensus of $1.93 on revenue of $4.38 billion. Revenues rose 9% year over year and adjusted net earnings rose 17% year over year. In January of 2023, Automatic Data Processing (NASDAQ:ADP) said it expected revenue growth of 8% to 9% and adjusted EPS growth of 15% to 17% for FY23.
8. Deere & Company (NYSE:DE)
EPS Next 5 Year Ratio According to FINVIZ.com: 13.70%
Net Income (TTM) as of January 31, 2023: $8.187 billion
Deere & Company (NYSE:DE) is one of the most profitable farm and heavy construction machinery companies in the world with net income of $8.187 billion in the trailing twelve months as of January 31, 2023. For the future, Deere & Company (NYSE:DE) is expected to grow its EPS by an average rate of 13.7% a year over the next 5 years. In February, the company’s board of directors also raised its quarterly dividend to $1.25 per share from $1.20 per share. As a result, Deere & Company (NYSE:DE) has a dividend yield of 1.19% as of March 1.
7. Visa Inc. (NYSE:V)
EPS Next 5 Year Ratio According to FINVIZ.com: 15.48%
Net Income (TTM) as of December 31, 2022: $15.18 billion
Visa Inc. (NYSE:V) is a leading payments company that has high margins and substantial profits given its net income of $15.18 billion in 2022. For the future, Visa Inc. (NYSE:V) has an EPS Next 5 Year Ratio of 15.48% given the expected continued growth in credit card payments. Given the potential for technological disruption from smartphones and innovation, Visa Inc. (NYSE:V) will need to innovate to keep its market share in the future.
6. Thomson Reuters Corporation (NYSE:TRI)
EPS Next 5 Year Ratio According to FINVIZ.com: 17%
Net Income (TTM) as of December 31, 2022: $1.402 billion
Thomson Reuters Corporation (NYSE:TRI) is a leading business information services company that has an EPS Next 5 Year Ratio of 17%, ranking #6 on our list of 16 High Growth Non-Tech Stocks That Are Profitable. For the fourth quarter, Thomson Reuters Corporation (NYSE:TRI)’s total revenue rose 3% year over year and its organic revenue rose 6% year over year. In February 2023, the company’s board increased the annualized dividend per share by 10% for the 30th consecutive annual increase. Thomson Reuters Corporation (NYSE:TRI) had a net income of $1.402 billion for 2022.
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Disclosure: None. 16 High Growth Non-Tech Stocks That Are Profitable is originally published on Insider Monkey.
