While the market dropped considerably today due to a rise in COVID cases, one might think that the only place for growth would be in technology and biotech stocks. But I’m here to prove that wrong. I’ve found three stocks in other industries with considerably high earnings growth potential.
When I say about considerably high, I’m referring to earnings growth over 100% next year. While most companies are happy to achieve 10-15% annual earnings growth, these companies destroy those figures. Plus, they’re not just any flash in the pan either. The stocks are forecasted to have strong growth over the next few years, not just next year.
These stocks are also profitable and reasonably valued so that they can be purchased at fair prices. It seems like a “too good to be true” deal, but it’s true, and I’m here to tell you about the following three stocks: Agnico Eagle Mines (AEM – Get Rating), Cabot Oil & Gas Corporation (COG – Get Rating), and RenaissanceRe Holdings (RNR – Get Rating).
Agnico Eagle Mines (AEM – Get Rating)
AEM is a gold miner operating mines in Canada, Mexico, and Finland. The company has an enviable exploration budget and has been reinvesting its assets to expand output. The budget is funded by the company’s strong cash flow. The company is doing so well that its earnings estimates have recently been increased, which is always a good sign for a stock. AEM reports its earnings on Wednesday, October 28th, after the close.
The company’s Kittila mine in Finland is the largest primary gold producer in Europe, which is also a primary driver of growth for the company. The expansion of the mine should increase mine efficiency and lower operating costs. The LaRonde, Canadian Malartic, and Nunavut projects also drive strong cash flow for the company. AEM is also one of a select few major gold miners that are generating organic growth.
AEM’s earnings are expected to grow a whopping 103.9% next year and at an average of 53.6% over the next five years. The stock is rated a “Buy” in our POWR Ratings system. It holds a grade of “A” for Trade Grade and a “B” for Buy & Hold Grade and Peer Grade. Those are three out of the four components that make up the POWR Ratings. The stock is also ranked #2 in the Miners – Gold industry.
Cabot Oil & Gas Corporation (COG – Get Rating)
COG is an independent gas exploration and production company based in Houston with operations in Appalachia. The company’s growth is primarily driven by high-impact natural gas-focused drilling in the Marcellus Shale. The Marcellus Shale is the largest natural gas field in the United States and one of the world’s largest, making COG a strong energy pick in an overall weak energy sector.
While natural gas has been volatile, the company has been able to perform well due to its cost-cutting initiative. COG reduced its 2019 finding and development costs by 5.13%. As management continues to improve efficiencies, the company should see high-profit margins going forward. COB has a solid balance sheet as its total assets are nearly double its total liabilities. The company is also committed to returning 50% of its free cash flow to shareholders in the form of share buybacks and dividends.
COG’s earnings are projected to grow an unbelievable 194.9% next year, while its average annual five-year growth forecast is still an impressive 26.1%. The company reports its latest results on Thursday, October 29th. The stock is rated a “Buy’ in our POWR Ratings system. It holds a grade of “A” for Trade Grade and Peer Grade, and a “B” for Buy & Hold Grade. COG is also ranked #3 out of 97 stocks in the Energy – Oil & Gas industry.
RenaissanceRe Holdings (RNR – Get Rating)
So, we’ve had a gold miner, a natural gas producer, and now an insurance company. Who said growth was only found in technology these days? RNR provides reinsurance and insurance solutions. Its core products include property catastrophe and specialty reinsurance risks. The company has seen strong growth in gross premiums written, which has doubled over the past five years. This was driven by premium growth in its Casualty and Specialty plus Property segments.
The company has been able to streamline its business operations by cutting low return riskier assets and purchasing assets that can increase its growth. For instance, it sold off its U.S based weather and weather-related energy risk management unit. This will protect the company from uncertainties in the weather. It also purchased Tokio Millennium Re last year to expand its portfolio.
RNR has been growing its cash flow, which is being invested back into the company and towards dividend increases. Like AEM and COG, RNR also has a growth estimate of over 100% next year. The company is expected to grow 126.4% next year and at a rate of 24.7% over the next five years. The company reports its earnings tomorrow after the close. The stock is rated a “Buy’ in the POWR Ratings system with grades of “B” for Trade Grade, Buy & Hold Grade, and Peer Grade. It is also the #2 ranked stock in the Insurance – Reinsurance industry.
AEM shares were unchanged in after-hours trading Monday. Year-to-date, AEM has gained 30.00%, versus a 6.96% rise in the benchmark S&P 500 index during the same period.
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