In the equity market, investors often seek strategies that can balance risk and reward, especially during periods of heightened volatility and economic uncertainty. While some investors favor deeply discounted value stocks and others pursue high-growth opportunities, a blended approach has increasingly proven effective in navigating changing market conditions.

This has led to the growing popularity of the GARP (growth at a reasonable price) strategy, which combines the core principles of value and growth investing. Rather than focusing solely on undervalued stocks or aggressive growth plays, GARP investors look for companies that offer sustainable earnings growth while still trading at attractive valuations. The approach aims to capture long-term upside potential without overpaying for momentum-driven stocks.

The success of this hybrid investing strategy has been evident in several outperforming stocks across sectors in recent years. Companies with strong fundamentals, resilient earnings growth and reasonable valuations have delivered substantial returns, highlighting the effectiveness of balancing value with growth characteristics. Here, we discuss four such stocks: DaVita (DVA Quick QuoteDVA - Free Report) , Integra LifeSciences (IART Quick QuoteIART - Free Report) , Braskem (BAK Quick QuoteBAK - Free Report) and LyondellBasell Industries (LYB Quick QuoteLYB - Free Report) .

A Few More Words on GARP

GARP investing gives priority to one of the popular value metrics, the price/earnings growth (PEG) ratio. Although it is categorized under value investing, this strategy follows the principles of both growth and value investing.

The PEG ratio is defined as (Price/ Earnings)/Earnings Growth Rate.

It relates the stocks’ P/E ratios to the future earnings growth rates.

While P/E alone gives an idea of stocks that are trading at a discount, PEG, while adding the growth element to it, helps identify stocks with solid future potential.

A lower PEG ratio, preferably less than 1, is always better for GARP investors.

Say, for example, if a stock's P/E ratio is 10 and the expected long-term growth rate is 15%, the company's PEG will come down to 0.66, a ratio indicating both undervaluation and future growth potential.

Unfortunately, this ratio is often neglected due to investors' limitations in calculating the future earnings growth rate of a stock.

There are some drawbacks to using the PEG ratio, though. It does not consider the very common situation of changing growth rates, such as the forecast of the first three years at a very high growth rate, followed by a sustainable but lower growth rate over the long term.

Hence, PEG-based investing can be even more rewarding if some other relevant parameters are also taken into consideration.

Here are the screening criteria for a winning strategy:

PEG Ratio less than X Industry Median

P/E Ratio (using F1) less than X Industry Median (For more accurate valuation purposes)

Zacks Rank #1 (Strong Buy) or 2 (Buy) (Whether good market conditions or bad, stocks with a Zacks Rank #1 or #2 have a proven history of success.)

Market Capitalization greater than $1 Billion (This helps us to focus on companies that have strong liquidity.)

Average 20-Day Volume greater than 50,000: A substantial trading volume ensures that the stock is easily tradable.

Percentage Change F1 Earnings Estimate Revisions (4 Weeks) greater than 5%: Upward estimate revisions add to the optimism, suggesting further bullishness.

Value Score of less than or equal to B: Our research shows that stocks with a Value Style Score of A or B, when combined with a Zacks Rank #1, 2 or 3 (Hold), offer the best upside potential.

Growth Score of less than or equal to B: Our research shows that stocks with a Growth Style Score of A or B, when combined with a Zacks Rank #1, 2 or 3, offer the best upside potential.

Our PEG-Driven Picks

Here are four stocks that qualified for the screening:

DaVita: Headquartered in Denver, CO, DaVita is a leading provider of dialysis services in the United States to patients suffering from chronic kidney failure, also known as end-stage renal disease. Its U.S. dialysis segment remains the primary earnings driver, supported by steady reimbursement and cost control. Management also highlighted continued momentum within the Integrated Kidney Care during first-quarter 2026

DVA can be an impressive GARP investment pick with its Zacks Rank #1, a Value Score of B and a Growth Score of B. Apart from a discounted PEG and P/E, the stock has an impressive long-term expected growth rate of 20.2%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Integra: Headquartered in Plainsboro, NJ, Integra LifeSciences Holdings Corporation is one of the world leaders in regenerative medicine. The company develops, manufactures and markets surgical implants and medical instruments. Integra is seeing steadier demand in Specialty Surgery, supported by its neurosurgery franchise and a broader ENT platform from Acclarent, while improving supply execution is helping conversion and capital equipment placements.

IART has a Zacks Rank #2, a Value Score of B and a Growth Style Score of B. Integra also has a five-year expected growth rate of 5.9%.

Braskem: Braskem manufactures and sells petrochemicals, thermoplastic resins and fuels in Brazil and international markets. Its portfolio includes polyethylene, polypropylene, PVC and basic chemicals, along with utilities, industrial services, electricity and natural gas supply.

BAK stock can be an impressive GARP investment pick with its Zacks Rank #2, a Value Score of A and a Growth Score of B. Apart from a discounted PEG and P/E, Braskem has an impressive long-term expected growth rate of 16.8%.

LyondellBasell: Based in Houston, TX, LyondellBasell is among the leading plastics, chemical and refining companies globally with operations across 18 countries. The company’s products are used across various industries, including electronics, automotive parts, packaging, construction materials and biofuels.

LYB can also be an impressive GARP investment pick with its Zacks Rank #1, a Value Score of B and a Growth Score of B. Apart from a discounted PEG and P/E, the stock also has a solid long-term historical growth rate of 49.4%.