Add These 4 GARP Stocks to Your Portfolio to Receive Handsome Returns

If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, try the growth at a reasonable price or GARP strategy.

The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best of value and growth investing. Vertiv VRT, Autodesk ADSK, Powell Industries POWL and Jabil JBL are some GARP stocks that hold promise.

GARP Metrics: Mix of Growth & Value Metrics

The GARP strategy seeks to offer an ideal investment by utilizing the best features of value and growth investing. Investors adopting the GARP approach prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.

Growth Metrics

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

Another metric that growth and GARP investors consider is return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Stocks with positive cash flows find precedence under the GARP plan.

Value Metrics

GARP investing prioritizes popular value metrics — the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios.

Using the GARP principle, we ran 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).

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

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

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

Here are four stocks from the 10 that made it through the screening process. Each of these stocks given below carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Vertiv represents a compelling buy opportunity in the near term, driven by strategic positioning in AI infrastructure. The December 2025 completion of its $1 billion PurgeRite acquisition strengthened its liquid cooling capabilities, critical for AI data centers. The new Malaysia manufacturing facility, set to open in the first quarter of 2026, will expand production capacity. Vertiv's engineering-ready 800 VDC platform designs with NVIDIA, planned for release in second-half 2026, position it to capitalize on next-generation AI factory deployments. With third-quarter 2025 organic orders surging 60% and a raised full-year guidance, strong execution momentum and expanding manufacturing capacity create a powerful growth trajectory for 2026.

The stock has surged 39% in the past six-month period. It has a trailing four-quarter earnings surprise of 14.89%, on average. The Zacks Consensus Estimate for VRT’s 2026 earnings has moved north by 0.4% to $5.21 per share over the past 30 days.

Autodesk’s third-quarter fiscal 2026 results showcased exceptional performance with 18% revenue growth to $1.85 billion and 23% AECO segment expansion, exceeding expectations. Autodesk's leadership in defining the AI revolution for design and make is positioning the company to capture value through subscription, consumption, and outcomes-based models blending human and machine capabilities. Management raised full-year guidance, reflecting strong business momentum despite macro uncertainty. The successful sales optimization execution, consistent double-digit billings growth, and expanding AI-powered platform capabilities underscore Autodesk's strategic positioning for sustained shareholder value creation throughout 2026.

The stock has lost 6.9% in the past six-month period. It has a trailing four-quarter earnings surprise of 7.28%, on average. The Zacks Consensus Estimate for ADSK’s fiscal 2026 earnings has moved north by 0.2% to $10.21 per share over the past 30 days.

Powell Industries’ $12.4 million Jacintoport facility expansion, beginning first-quarter 2026, positions it to capture the anticipated three-to-five-year LNG project surge. With record gross margins of 31.4% in in the fourth quarter of 2025, a diversified $1.4 billion backlog (60% converting in 2026), and zero debt alongside $476 million cash, Powell demonstrates exceptional financial strength. The November 2025 Remsdaq acquisition enhances margin-accretive automation capabilities, while management's confidence in sustaining upper-20% margins throughout fiscal 2026 underscores solid execution. Growing data center and electric utility exposure (50% growth) further reduces cyclical volatility, making Powell attractively positioned for 2026.

The stock has returned 66.4% in the past six-month period. It has a trailing four-quarter earnings surprise of 8.38%, on average. The Zacks Consensus Estimate for POWL’s fiscal 2026 earnings has remained steady at $15.27 per share over the past 30 days.

Jabil presents a compelling buy opportunity in 2026 following exceptional first-quarter fiscal 2026 results, with revenues surging 19% year over year to $8.3 billion and core EPS reaching $2.85. The Intelligent Infrastructure segment delivered a remarkable 54% growth rate, driven by accelerating AI and data center demand. The strategic Hanley Energy acquisition, closing in January with $200-350 million revenue contribution, strengthens vertical integration in high-growth data center markets. Management's $500 million U.S. manufacturing investment demonstrates confidence in sustained AI infrastructure expansion. With raised fiscal 2026 guidance projecting $32.4 billion in revenues, 5.7% core margins, and $11.55 EPS alongside robust $1.3 billion free cash flow generation, Jabil's diversified portfolio positions it as a prime beneficiary of AI's multiyear growth trajectory.

The stock has returned 1.1% in the past six-month period. It has a trailing four-quarter earnings surprise of 9.82%, on average. The Zacks Consensus Estimate for JBL’s fiscal 2026 earnings has moved north by 4.5% to $11.55 per share over the past 30 days.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research