Include These Four GARP Stocks in Your Portfolio for Attractive Gains

Explore GARP Investing for Balanced Growth and Value

If you're seeking a stock portfolio that combines both value and growth, the Growth at a Reasonable Price (GARP) approach may be ideal. This method enables investors to target undervalued companies with strong future potential. Unlike traditional blend strategies, GARP portfolios focus on stocks that deliver the advantages of both value and growth investing. Notable examples of promising GARP stocks include Tapestry, Phibro Animal Health, Autodesk, and Ameriprise Financial.

Key GARP Criteria: Integrating Growth and Value

GARP investing aims to strike a balance by leveraging the strengths of both value and growth strategies. Investors following GARP typically seek stocks trading below market value or a reasonable target based on fundamental analysis, while also ensuring these companies have robust cash flow, revenue, and earnings per share (EPS) prospects.

• Growth Factors: GARP investors prioritize companies with consistent earnings growth and solid future outlooks. Rather than chasing exceptionally high growth rates, they favor steady growth, typically between 10% and 20%. Return on equity (ROE) is another important metric, with GARP investors seeking stocks that outperform the industry average. Positive cash flow is also a key consideration.
• Value Factors: GARP focuses on value indicators such as price-to-earnings (P/E) and price-to-book (P/B) ratios. While GARP investors may accept higher P/E ratios than pure value investors, they avoid stocks with excessively high valuations.

Using these principles, a screening process was conducted to identify stocks with strong near-term return potential.

Stock Screening Methodology

In addition to the criteria above, the screening included stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy).

• EPS Growth: Companies with a history of 5-year EPS growth and projected 3-5-year EPS growth rates between 10% and 25% were selected, indicating improving business performance.
• ROE: Stocks with ROE over the past year exceeding the industry average were favored, highlighting superior quality.
• P/E and P/B Ratios: Only stocks with P/E and P/B ratios below the industry average were included, suggesting undervaluation.

From the 25 stocks that passed these filters, four stand out:

Tapestry

Tapestry's Amplify growth plan is set to drive ongoing progress into fiscal 2026. The Coach brand achieved 25% revenue growth in the fiscal second quarter, propelled by innovative handbag offerings and rising unit sales. The company is expanding its presence in Europe and Greater China, which are becoming key growth regions. Its direct-to-consumer channel saw about 20% digital growth, reflecting stronger customer engagement. Following its February 2026 earnings report, management raised guidance for revenue, operating margin, and EPS, projecting over 25% EPS growth for fiscal 2026. A quarterly dividend in March 2026 and a $1.2 billion share buyback program underscore strong free cash flow and confidence in sustained earnings growth. The Zacks Consensus Estimate for fiscal 2026 earnings has increased by 3.6% to $6.34 per share in the past month, with the company beating estimates in the last four quarters, averaging a 12.84% positive surprise.

Phibro Animal Health

Phibro Animal Health is poised for continued growth through fiscal 2026, supported by strong fundamentals. The rapid integration of its Medicated Feed Additive portfolio has significantly boosted Animal Health revenues. Nutritional specialty products are benefiting from increased North American dairy demand, and poultry vaccine sales are rising in Latin America and Southeast Asia. Management has raised its fiscal 2026 net sales forecast to $1.45–$1.50 billion and expects adjusted EPS between $2.93 and $3.10, reflecting operational strength. Mineral Nutrition is also expanding, driven by higher demand for trace minerals and zinc. The company's quarterly dividend announced in February 2026 highlights financial stability and commitment to shareholder returns. The Zacks Consensus Estimate for fiscal 2026 earnings has risen by 2% to $3.03 per share in the past month, with the company exceeding estimates in the last four quarters, though the average surprise was -20.15%.

Autodesk

Autodesk is well-positioned for expansion in 2026, driven by strong underlying catalysts. Its fiscal 2027 revenue guidance of $8.10–$8.17 billion signals robust momentum. In February 2026, Autodesk made its largest startup investment, acquiring a $200 million stake in World Labs to advance AI technology capable of spatial reasoning. The integration of Autodesk Construction Cloud into Autodesk Forma, effective March 24, will unify its AECO cloud offerings. The March 2026 Fusion update enhances manufacturing and design capabilities. These initiatives—AI leadership, platform consolidation, and increased subscription monetization—are expected to fuel sustained revenue and margin growth through fiscal 2027. The Zacks Consensus Estimate for fiscal 2027 earnings has climbed by 8% to $12.38 per share in the past month, with the company beating estimates in the last four quarters, averaging a 7.5% positive surprise.

Ameriprise Financial

Ameriprise Financial is set to maintain its growth trajectory in 2026, supported by expanding institutional partnerships and a deepening fee-based revenue model. In February 2026, Huntington Bank chose Ameriprise as its new retail investment program provider, adding around 260 advisors and nearly $28 billion in client assets, demonstrating the strength of its technology and planning platform. The launch of Seligman Ventures, a $500 million venture capital arm focused on AI and cloud infrastructure, marks significant diversification within Columbia Threadneedle's asset management business. The company's expanding Financial Institutions Group, strong wrap account inflows, and disciplined capital returns reinforce its structural growth outlook. The Zacks Consensus Estimate for 2026 earnings has decreased by 0.3% to $41.62 per share in the past month, with the company beating estimates in the last four quarters, averaging a 3.49% positive surprise.

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Free Stock Analysis Reports

• Ameriprise Financial, Inc. (AMP): Free Stock Analysis Report
• Autodesk, Inc. (ADSK): Free Stock Analysis Report
• Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report
• Tapestry, Inc. (TPR): Free Stock Analysis Report