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What are the top growth stocks of 2021?  

A stock of a company whose earnings and revenue are anticipated to grow at a more rapid rate than the average company within the same industry is called a growth stock.

Generally, growth stocks offer very low or no dividends at all, and this is because growth stock companies mostly reinvest all their retained earnings back into the company.

How to find potential growth stocks?

If you want to find potential growth stocks, then the following aspects should be in your mind:

Solid leadership skills

Growth stock companies are all about increasing profits and sales, and because of this fact, the management teams of the companies matter a lot.

If the management team lacks leadership skills, growth won’t happen, and thus, you need to pick that growth stock company whose management comes with impressive leadership skills.

Relevant market

The growth stock should be a part of the market that is poised to grow or is already in growing mode. For example, the desktop computer market has almost no relevance in today’s era, and thus, investing in a desktop computer company sounds like a loss.

A strong sales record

A growth stock that is expected to bring positive results in the future is a good choice, but a growth stock with a strong sales record is a more satisfying choice.

Big markets

Consider the growth stock companies that are part of big markets because the more customers, the more successful will be growth stocks.

What are the best growth stocks 2021?

If you are searching best long term growth stocks to buy now, then consider the following top growth stocks:

 

1. Digital Turbine (APPS)

The shares of this leading content delivery company have been in rocket mode this year. The three-year sales growth rate of Digital Turbine is +18.04%, and the three-year earnings growth rate is -9.34%.

 

2. ETSY (ETSY)

Offering many unique products, this e-commerce platform has performed well in the new stay-at-home world. It has strong sales and earnings growth. The three-year sales growth rate of ETSY is +31.09%, and the three-year earnings growth rate is +8.87%.

 

3. Lululemon Athletica (LULU)

Lululemon Athletica is a leading athletic wear company. Just like Digital Turbine and ETSY, the growth rate of Lululemon Athletica is also impressive. The three-year sales growth rate of Lululemon Athletica is +19.39%, and the three-year earnings growth rate is +37.78%.

 

4. Roku (Roku)

Roku is a leading streaming giant and has been doing a great job in growing revenues. The three-year sales growth rate of Roku is +41.82%, and the three-year earnings growth rate is -157.11%.

What are the best dividend growth stocks 2021?

Following are the top dividend growth stocks in 2020:

 

1. PepsiCo (PEP)

This global beverage and food company distributes beverages under well-recognized brands such as Gatorade, Pepsi, and food and snacks under brands such as Lay’s, Cheetos.

 

2. 3M Company (MMM)

This technology company with worldwide operations has leading positions in consumer and office, electronics and communications, display and graphics, industrial, transportation, healthcare, and some other businesses.

 

3. Cisco Systems (CSCO)

Cisco Systems is involved in designing, manufacturing, and selling Internet protocol-based products and services. Apart from this, it is also focused on delivering integrated solutions to develop and connect networks around the globe.

What are the best growth stock mutual funds to buy now in 2021?

The following are the top growth stock mutual funds to buy now:

 

1. MFS Growth Fund

This fund may be the best for investors who are fascinated by the rapidly growing companies in the financials and tech sectors. The top three holdings of the MFS Growth Fund are represented by Amazon.com (AMZN), Microsoft Corp. (MSFT), and Visa (V).

 

2. Vanguard Mega Cap Growth ETF 

Compared to other fund companies, Vanguard Mega Cap Growth ETF is a cheaper buy. It has its main focus on tech companies, including Amazon and Apple (AAPL). Being an index ETF, this fund tracks the performance of the CRSP U.S. Mega Cap Growth Index.

 

3. T. Rowe Price Blue Chip Growth Fund

T. Rowe Price Blue Chip Growth Fund includes many of the best-recognized large-cap companies of the market, including Facebook (FB), Amazon, and Boeing Co. (BA).

What are the points that differentiate growth and value stocks from each other?

Growth vs Value stocks

The following explanation can help you understand the differences between growth and value stocks:

Pricing Growth Stock 2021

Growth stocks, with significantly high growth rate, are correctly valued or sometimes overvalued. Thus, they come at a high price in the market.

Whereas,

Value stocks are undervalued stocks. They have the potential to grow and generate a considerable amount of returns in the future, and thus, they have a much lower price than similar stocks in the market. 

Growth Stocks Business profile

Growth stocks are innovative companies, and most companies continue to progress over time.

Unlike penny stocks, those stocks that trade at a per-share value of $5 or less, the majority of the value stocks are well-established, large companies. Such companies are undervalued for a variety of reasons, such as a bad earnings season, but they gain value back in the long-term.

Metric ratios of Growth Stock 2021

Generally, growth stocks have high P/E ratios and P/B ratios.

Whereas,

Generally, value stocks have low P/E ratios and P/B ratios, and this is because of their undervalued nature. 

Growth Stock Dividends

Generally, growth stocks offer very low or no dividends at all, and this is because growth stock companies mostly reinvest all their retained earnings back into the company.

Whereas,

Generally, value stocks offer high dividends, and unlike growth stocks, they don’t reinvest all the retained earnings back into the company.

Risk

Since the growth rate of growth stocks is high and increasing, they are less risky. Compared to the overall market, growth stocks are relatively less sensitive to adverse economic conditions, and thus, they are less risky investments.

Whereas,

On the off chance, expectations aren’t met, and the stock doesn’t appreciate the value, investors may lose their money. Thus, value stocks are relatively risky.