Top Growth Stocks for August 2022

CLF is top for EPS and combined growth and CTRA is top for sales

Growth investing is one of two main fundamental investment strategies, the other being value investing. Investors employing a growth investing strategy will typically place the majority of their portfolio in growth stocks, which are shares of companies with earnings or sales expected to grow at a significantly faster rate than the rest of the market will. These companies generally don’t pay dividends at this stage of their industry life cycle because all earnings are usually reinvested back into the business to generate even more earnings or revenue in the future.

The primary way that investors expect to earn profits from growth investing is through capital gains. Classic examples of growth stocks in recent years have included Apple Inc., Amazon.com Inc., and Netflix Inc.

Growth stocks, as represented by the Russell 1000 Growth Index, have underperformed the broader market over the past year. The Growth Index has provided a total return of -14.1% over the past 12 months, below the benchmark Russell 1000 Index's -9.4% total return. These market performance numbers and all statistics in the tables below are as of June 24, 2022.

Here are the top three stocks with the fastest earnings-per-share (EPS) growth, the top three stocks with the fastest sales growth, and the top three stocks ranked according to a 50/50 weighting of their combined EPS and sales growth.

Top Growth Stocks by EPS Growth

These are the stocks with the highest year-over-year (YOY) EPS growth for the most recent quarter. Rising earnings show that a company’s business is growing and generating more money that it can reinvest or return to shareholders. Companies with a quarterly EPS of more than 2,500% were excluded as outliers.

Top Growth Stocks by EPS Growth
  Price ($) Market Cap ($B) EPS Growth (%)
Cleveland-Cliffs Inc. (CLF) 16.48 8.6 2,040
Ashland Global Holdings Inc. (ASH) 103.18 5.6 1,940
Marathon Oil Corp. (MRO) 22.05 15.6 1,380

Source: YCharts

  • Cleveland-Cliffs Inc.: Cleveland-Cliffs is a major North American flat-rolled steel producer and supplier of iron ore pellets. The company also supplies stainless steel tubing and other products.
  • Ashland Global Holdings Inc.: Ashland Global Holdings makes specialty materials for customers in markets including energy, automotive, construction, food and architectural coating. Ashland's Q2 FY 2022 ended March 31, 2022 and the company released an earnings report for the quarter on April 26. For that period, net income grew more than 19-fold as sales climbed more modestly year-over-year (YOY). Performance was driven by double-digit sales growth across each of Ashland's reportable segments.
  • Marathon Oil Corp.: Marathon Oil is an independent energy company focused on the exploration and production of oil and gas. The company's operations are primarily located in Texas, North Dakota, Oklahoma, New Mexico, and Equatorial Guinea. On June 10, the company paid a quarterly dividend of 8 cents per share of common stock, constituting an increase of 15% over the previous base dividend.

Top Growth Stocks by Sales Growth

These are the stocks with the highest YOY sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue through organic or new methods, as well as find growing companies that have not yet reached profitability. In addition, accounting factors that may not reflect the overall strength of the business can significantly influence EPS. However, sales growth can also be potentially misleading about the strength of a business because growing sales for money-losing businesses can be harmful if the companies have no plans to reach profitability. Companies with a quarterly revenue growth of more than 2,500% were excluded as outliers.

Top Growth Stocks by Revenue Growth
   Price ($) Market Cap ($B)  Revenue Growth (%) 
Coterra Energy Inc. (CTRA 26.35 21.2 265.0
Zillow Group Inc. (ZG) 35.69 8.8 249.5
Moderna Inc. (MRNA) 144.27 57.4 213.2

Source: YCharts

  • Coterra Energy Inc.: Coterra Energy is an oil and gas exploration and production company with operations focused in the Permian Basin, Marcellus Shale, and Anadarko Basin. Coterra's Q1 2022 earnings results were released on May 2. In that quarter, Coterra said that net income surged nearly five-fold on revenue that more than tripled YOY. Favorable commodity prices and strong program execution were factors contributing to growth.
  • Zillow Group Inc.: Zillow Group offers an online real estate platform. The platform enables users to buy, sell, and rent homes as well as search financing options. The company also offers a suite of marketing software and technology for the real estate industry.
  • Moderna Inc.: Moderna is a biotech company that focuses on RNA therapeutics, primarily mRNA vaccines. It offers a clinical portfolio of vaccines and therapeutics including one of the earliest vaccines against the COVID-19 pandemic. The U.S. Food and Drug Administration provided emergency use authorization for Moderna's COVID-19 vaccine in children ages 6 months through 5 years at a reduced dose level on June 17. The vaccine for children at this age is a two-dose regimen.

Top Growth Stocks by EPS and Revenue

These are the top growth stocks in the Russell 1000 Index as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY EPS growth. Both sales and earnings are critical factors in the success of a company. Moreover, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with a quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Top Growth Stocks by EPS and Revenue
   Price ($) Market Cap ($B)  Revenue Growth (%)  EPS Growth (%)
Cleveland-Cliffs Inc. (CLF) 16.48 8.6 47.1 2,040
Ashland Global Holdings Inc. (ASH) 103.18 5.6 18.7 1,940
Coterra Energy Inc. (CTRA) 26.35 21.2 265.0 138.7

Source: YCharts

  • Cleveland-Cliffs Inc.: See company description above.
  • Ashland Global Holdings Inc.: See company description above.
  • Coterra Energy Inc.: See company description above.

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  1. YCharts. “Financial Data.”

  2. Ashland Global Holdings Inc. "Ashland reports financial results(1) for second quarter of fiscal year 2022 consistent with previous update."

  3. Marathon Oil Corp. "Marathon Oil Corporation Declares First Quarter 2022 Dividend."

  4. Coterra Energy Inc. "Coterra Energy Reports First-Quarter 2022 Results, Announces Quarterly Dividend and Provides Update on Share Repurchase Program."

  5. Moderna Inc. "Moderna Receives FDA Authorization for Emergency Use of Its COVID-19 Vaccine for Children 6 Months of Age and Older."

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