4 GARP Stocks That Investors Can Scoop Up for Maximum Returns

Growth at a reasonable price, or GARP, is an excellent strategy to earn quick investment profits. The GARP approach helps identify stocks priced below the market or any suitable target determined by a fundamental analysis.

The strategy helps investors gain exposure to stocks with impressive prospects and trading at a discount. GARP stocks have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and other metrics.

A portfolio based on the GARP strategy comprises stocks that offer the best value and growth investment. Royal Gold RGLD, NVIDIA NVDA, Expedia Group EXPE and Powell Industries POWL are some promising GARP stocks.

GARP Metrics: Mix of Growth & Value Metrics

The GARP strategy offers ideal investment options, utilizing the best value and growth investing features. Investors adopting the GARP approach prefer stocks priced below the market or any reasonable target determined by fundamental analysis. The stocks have solid prospects based on cash flow, revenues, EPS, etc.

Growth Metrics

A strong earnings growth history and impressive earnings prospects are the primary concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. The GARP strategy considers growth rates between 10% and 20% ideal.

Another metric considered by growth and GARP investors is return on equity (ROE). GARP investors look for strong and higher ROE than the industry average to identify superior stocks. Moreover, stocks with a positive cash flow take precedence under the GARP plan.

Value Metrics

GARP investing prioritizes one of the popular value metrics, the price-to-earnings (P/E) ratio. The investing style picks stocks with higher P/E ratios than value investors, but it avoids companies with extremely high P/E ratios. The price-to-book value (P/B) ratio is also taken into consideration.

Using the GARP principle, we have run a screen to identify stocks that should offer solid returns in the near term.

Screening Parameters

Along with the criteria discussed in the above section, we have considered a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here. 

Last five-year EPS & projected 3-5-year EPS growth rates between 10% and 25% (Strong EPS growth history and prospects ensure improving business.)

ROE (in the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)

P/E and P/B ratios are less than the M-industry average (P/E and P/B ratios less than the industry indicate that the stocks are undervalued).

Here are four out of the 10 stocks that made it through the screen.

Royal Gold has been benefiting from its solid streaming agreements. The company maintains a strong balance sheet, which is likely to drive growth in the upcoming quarters. It is focused on allocating its strong cash flow to dividends, debt reduction and new businesses. Gold prices have been on an uptrend this year, aided by geopolitical reasons, a depreciating U.S. dollar, the potential for monetary policy easing and continuous purchasing by central banks. Silver has also gained on the back of the recent expansion seen in the U.S. manufacturing sector. This rise in gold and silver prices will also boost the company’s results in the coming quarters. 

Royal Gold has completed the acquisition of Sandstorm Gold Ltd., bringing the two precious metals streaming and royalty companies under a single entity. The combined entity boasts a larger, more diversified global portfolio of precious metal assets, with 40 producing assets added from Sandstorm's portfolio.

This Zacks Rank #1 stock has returned 24.7% in the past six-month period. It has a trailing four-quarter earnings surprise of 3.92%, on average. The Zacks Consensus Estimate for RGLD’s 2025 earnings has moved north by 0.1% to $7.97 per share over the past 30 days.

NVIDIA is benefiting from the strong growth of AI and high-performance accelerated computing. The growing demand for generative AI and large language models using graphics processing units (GPUs) based on NVIDIA’s Hopper and Blackwell architectures is aiding data center revenues. This Zacks Rank #1 company’s networking business, including NVLink and Spectrum-X, is also contributing to growth by enabling faster and more efficient data movement within AI clusters. These add-ons make NVIDIA’s full-stack approach more appealing to enterprises and governments building AI infrastructure. 

The continued ramp-up of Ada RTX GPU workstations in the ProViz end market, following the normalization of channel inventory, is acting as a tailwind. Collaborations with more than 320 automakers and tier-one suppliers are likely to advance its presence in the autonomous vehicle space. We expect NVIDIA’s revenues to witness a CAGR of 31% through fiscal 2026-2028.

This Zacks Rank #1 stock has returned 21% in the past six-month period. It has a trailing four-quarter earnings surprise of 2.77%, on average. The Zacks Consensus Estimate for NVDA’s fiscal 2026 earnings has moved north by 2.7% to $4.64 per share over the past 60 days.

Expedia’s strong brand portfolio, comprising Brand Expedia, Hotels.com, Vrbo, Orbitz, Travelocity, ebookers and Wotif Group, to name a few, offers a full range of travel and advertising services to travelers, suppliers and business partners. The company benefits from a strong platform model that enhances customer insights, strengthens supplier ties and helps grow revenues. Expedia looks like a compelling buy for 2026 following strong third-quarter 2025 results. The company’s $7.57 adjusted EPS beat estimates, and gross bookings grew 12%. The company raised full-year 2025 guidance to 7% bookings growth and doubled EBITDA margin expansion projections to 200 basis points, demonstrating operational excellence.

Expedia's December 2025 acquisition of Tiqets strengthens its B2B segment, which delivered its 17th consecutive quarter of double-digit growth at 26%. With AI integration enhancing efficiency, hotel bookings surging 15%, and room nights growing 11%, this Zacks Rank #1 company's diversified platform positions it to capitalize on robust travel demand and expanding profit margins throughout 2026.

This stock has surged 73.2% in the past six-month period. It has a trailing four-quarter earnings surprise of 4.53%, on average. The Zacks Consensus Estimate for EXPE’s 2025 earnings has remained steady at $15.09 per share over the past 30 days.

Powell engages in manufacturing and supplying custom-engineered equipment and systems that are used for distributing, controlling and monitoring the flow of electrical energy. Powell’s business momentum can be primarily attributed to its strong foothold and strength in two key markets, which are oil and gas and electric utility. A strong pipeline of projects within the LNG market and its growing presence across the data center and electric utility sectors, along with a solid backlog, are key catalysts behind the company’s growth.

Powell’s diversification efforts beyond its core oil, gas and petrochemical markets have enhanced its market share across other markets as well. It has been capitalizing on the global growth trends of electrification and digitalization. Its increased participation across the electrical power value chain has enabled it to generate solid bookings from the electric utility and commercial & other industrial markets. This has led to a strong backlog level, which was $1.4 billion (up 7% sequentially) while exiting the fiscal third quarter. 

This Zacks Rank #2 stock has returned 87.4% in the past six-month period. It has a trailing four-quarter earnings surprise of 8.39%, on average. The Zacks Consensus Estimate for POWL’s fiscal 2026 earnings has moved north by 2.2% to $15.27 per share over the past 30 days.

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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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