Buy These 4 Stocks With Solid Sales Growth Amid Market Uncertainty

Markets began 2025 on a strong note but have since been gripped by heightened volatility due to the Trump administration’s tariff plans and geopolitical headwinds, which have resulted in uncertainty. The ambiguity has clouded expectations around the tariffs’ potential impact on the U.S. economy and the Federal Reserve’s policy decisions. Hence, investors are approaching the markets with increased caution.

So, the conventional method of selecting stocks is the need of the hour. One such way is choosing stocks with steady sales growth. In this regard, The Walt Disney Company DIS, Agnico Eagle Mines Limited AEM, Adobe Inc. ADBE and Xylem Inc. XYL are worth considering.

When evaluating a company, investors often prioritize revenue over earnings, as growing sales indicate an expanding customer base and long-term potential. In contrast, stagnant or declining revenue can signal deeper operational challenges. While short-term profits can be achieved through cost-cutting, sustained earnings growth typically depends on consistent top-line expansion.

However, revenue growth alone doesn’t paint a complete picture of financial health. A more effective investment strategy involves analyzing a company’s cash position alongside its sales. Strong cash reserves and healthy cash flow offer the flexibility to navigate challenges, invest in growth opportunities and maintain operational stability.

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.

4 Stocks With Robust Sales Growth to Bet on

Burbank, CA-based Disney has assets that span movies, television shows and theme parks. DIS operates through three segments: Entertainment, Sports and Experiences. 

Disney’s expected sales growth rate for 2025 is 4.1%. DIS carries a Zacks Rank #2 at present.

Agnico Eagle Mines, headquartered in Canada, is a gold producer. AEM has mining operations in Canada, Mexico and Finland, and exploration activities in Canada, Europe, Latin America and the United States.

Agnico Eagle Mines’ expected sales growth rate for 2025 is 24.6%. AEM currently sports a Zacks Rank #1.

Adobe, based in San Jose, CA, is a leading technology company. ADBE provides a personalized digital experience by integrating artificial intelligence (AI) into its solutions. 

Adobe’s sales are expected to rise 9.5% in fiscal 2025. INTU carries a Zacks Rank #2 at present.

Washington, D.C.-based Xylem is one of the leading providers of water solutions worldwide. XYL is involved in the full water-process cycle, including collection, distribution and returning of water to the environment.

Xylem’s expected sales growth for 2025 is 2.2%. XYL, at present, carries a Zacks Rank #2.

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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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