5 Sales Growth Picks Positioned to Generate Steady Returns

As the U.S. economy continues to face sticky inflation and softening job growth, the Federal Reserve cut rates for the third time this year. Meanwhile, tariffs, supply-chain pressures and uneven business investment are weighing on economic growth. Thus, it is difficult for retail investors to interpret market signals and generate solid returns. 

The traditional way of picking stocks is a good idea now. Sales growth provides a more reliable view for evaluating stocks compared with earnings-focused metrics. Stocks like Vertiv Holdings Co VRT, RenaissanceRe Holdings Ltd. RNR, Ameren Corporation AEE, Canadian Natural Resources Limited CNQ and FedEx Corporation FDX are worth considering.

Sales growth is one of the clearest indicators of a company’s underlying business momentum. Unlike earnings that might be influenced by accounting choices or temporary cost adjustments, revenues reflect genuine demand for a company’s products or services. Consistent sales growth signals that a company is strengthening its market position, attracting new customers, or expanding into new segments. Thus, sales growth often serves as an early predictor of future earnings improvement, operational leverage and shareholder value creation.

Revenue trends are therefore valuable not only on an absolute basis but also relative to competitors and economic conditions. Sustained sales growth also supports more predictable cash flows, providing management the leverage to reinvest in operations, pursue strategic opportunities and maintain stability without excessive borrowing. One can use this information to identify businesses with durable competitive advantages and long-term potential.

Selecting the Potential Winning Stocks

To shortlist stocks with impressive sales growth and a high cash balance, we have selected 5-Year Historical Sales Growth (%) greater than X-Industry and Cash Flow of more than $500 million as our main screening parameters.

But sales growth and cash strength are not the absolute criteria for selecting stocks. Hence, we have added other factors to arrive at a winning strategy.

P/S Ratio less than X-Industry: This metric determines the value placed on each dollar of a company’s revenues. The lower the ratio, the better it is for picking a stock since the investor is paying less for each unit of sales.

% Change F1 Sales Estimate Revisions (four weeks) greater than X-Industry: Estimate revisions, better than the industry, are often seen to trigger an increase in stock price.

Operating Margin (average last five years) greater than 5%: Operating margin measures how much every dollar of a company's sales translates into profits. A high ratio indicates that the company has good cost control and sales are increasing faster than costs — an optimal situation.

Return on Equity (ROE) greater than 5%: This metric will ensure that sales growth is translated into profits and the company is not hoarding cash. A high ROE means that the company is spending wisely and is, in all likelihood, profitable.

Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform, irrespective of the market environment. You can see the complete list of today’s Zacks #1 Rank stocks here.

5 Stocks With Impressive Sales Growth to Bet on

Vertiv, based in Westerville, OH, is a leading global provider of critical digital infrastructure and services for data centers, communication networks, and commercial and industrial environments. VRT designs, manufactures, installs, maintains and services a broad portfolio of hardware, software and integrated solutions.

VRT’s expected sales growth rate for 2025 is 27.5%. Vertiv sports a Zacks Rank #1 at present.

Bermuda-based RenaissanceRe primarily provides property-catastrophe reinsurance to insurers and reinsurers globally. Additionally, RNR offers certain specialty reinsurance coverage on accident, health, aviation and satellite concerns, as well as homeowners' insurance in various parts of the U.S.

RenaissanceRe’s expected sales growth rate for 2025 is 3.4%. RNR currently sports a Zacks Rank #1.

Based in St. Louis, MO, Ameren is a utility company that generates and distributes electricity and natural gas in Missouri and Illinois. AEE serves nearly 2.5 million electric and more than 900,000 natural gas customers. 

Ameren’s sales are expected to rise 17.7% in 2025. AEE carries a Zacks Rank #2 at present.

Calgary, Canada-based Canadian Natural Resources is one of the largest independent energy companies in the country, which is engaged in the exploration, development and production of oil and natural gas. CNQ boasts a diversified portfolio of crude oil, natural gas, bitumen and synthetic crude oil.

Canadian Natural Resources’ expected sales growth for 2025 is 5.9%. CNQ, at present, carries a Zacks Rank #2.

Memphis, TN-based FedEx is the leader in global express delivery services. FDX provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand.

FedEx’s sales are expected to grow 4.6% in fiscal 2026. FDX carries a Zacks Rank #2 at present.

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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

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