But not all growth stocks are created equal: While some could still deliver extraordinary gains, others appear considerably overvalued, and might instead burden investors with hefty losses.
What exactly is a growth stock? Though it's arbitrary, I'll define a growth stock as any company forecast to grow profits by 10% or more annually during the next five years. To decide what's "cheap," I'll use the PEG ratio, which compares a company's price-to-earnings ratio to its future growth rate.
Any figure around or below one could signal a cheap stock. Attached you can find a list of dividend growth stocks with a history of consecutive dividend hikes of more than 5 years and a PEG ratio below one.
Each stock from the list is a Midcap with a market cap over 2 billion. I've tried to exclude all lower capitalized stocks out of the screen in order to keep the big risks away.
In total, there are 16 companies from my high quality dividend stock screen that fulfilled my criteria.
Here is the list of stocks with a PEG ratio below one....
|16 Income Growth Stocks With A PEG Below One |
(click to enlarge)