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Add These 4 GARP Stocks to Your Portfolio to Receive Handsome Returns
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Key Takeaways
The GARP strategy identifies undervalued stocks with solid growth prospects for maximum returns.
GARP combines value metrics like P/E ratios with growth rates between 10% and 25%.
FTNT, ABBNY, EAT and HALO represent promising GARP opportunities with strong fundamentals.
If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, you can try the growth at a reasonable price or GARP strategy.
The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best of value and growth investing. Fortinet (FTNT - Free Report) , ABB (ABBNY - Free Report) , Brinker International (EAT - Free Report) and Halozyme Therapeutics (HALO - Free Report) are some GARP stocks that hold promise.
GARP Metrics: Mix of Growth & Value Metrics
The GARP strategy seeks to offer an ideal investment by utilizing the best features of value and growth investing. Investors adopting the GARP approach prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.
Growth Metrics
A strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. Hence, growth rates between 10% and 20% are considered to be ideal under the GARP strategy.
Another metric that growth and GARP investors consider is return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Stocks with positive cash flows take precedence under the GARP plan.
Value Metrics
GARP investing prioritizes popular value metrics, the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios.
Using the GARP principle, we ran a screen to identify stocks that should offer solid returns in the near term.
Last 5-year EPS & projected 3-5-year EPS growth rates between 10% and 25% (Strong EPS growth history and prospects ensure improving business.)
ROE (over the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)
P/E and P/B ratios less than the M-industry average (P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued)
Here are four stocks from the 10 that made it through the screening process.
Fortinet is well-positioned to capitalize on accelerating enterprise demand for converged networking and security. The company's newly launched SASE Firewall category — anchored by the FortiGate 1200G series with FortiSASE Outpost — addresses growing enterprise sovereignty and AI infrastructure requirements, opening a differentiated market. FortiOS 8.0 reimagines secure networking for the AI era, while the new FortiSOC streamlines security operations through a unified, AI-powered platform.
A strategic collaboration with Intel to co-develop Security Processor 6 strengthens supply chain resilience. Partnerships with NVIDIA's Open Secure AI Alliance, Anthropic, and OpenAI deepen AI security credentials. Moody's recently upgraded Fortinet's credit to A3 — the highest among public cybersecurity companies. Management raised 2026 revenue guidance to $8.02 billion–$8.18 billion, reflecting 19% year-over-year growth.
The Zacks Consensus Estimate for FTNT’s 2026 earnings has moved 0.4% north to $3.42 per share in the past 30 days. This Zacks Rank #1 company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 20.34%.
ABB Ltd. is strategically positioned at the core of global electrification and automation megatrends. Its July 2026 acquisition bid for Rotork, a mission-critical flow control specialist, is set to add approximately 3% to revenues with immediate margin accretion, meaningfully expanding its automation portfolio. An August 2026 minority investment in LevelTen Energy, the world's largest clean energy marketplace, broadens advisory services as industrial decarbonization accelerates.
A September 2026 MoU with Rolls-Royce SMR to deploy automation and electrification solutions for small modular reactors positions ABB at an emerging nuclear frontier. The company-issued full-year 2026 guidance targets low double-digit to low-teens comparable revenue growth alongside year-on-year operational EBITA margin improvement. A record book-to-bill of 1.27 and net debt/EBITDA of 0.3 reinforce near-term momentum.
The consensus estimate for this Zacks Rank #1 company’s 2026 earnings has moved 0.3% north to $3.79 per share in the past 30 days. ABB’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters while missing the same twice, the average negative surprise being 2.05%.
Brinker International appears well-positioned for near-term growth, underpinned by meaningful capital and strategic moves. In July 2026, the company retired $350 million in 8.25% notes, reducing its interest burden. Shortly after, the board authorized $750 million under its share repurchase program, signaling balance sheet confidence and potential shareholder returns. The pending acquisition of 12 Chili's restaurants in Alabama and Mississippi marks a disciplined push toward portfolio expansion.
For fiscal 2027, management guided total revenues of $6.15 billion to $6.27 billion and non-GAAP EPS of $12.60 to $13.40, supported by a 53-week operating year. Chili's menu innovation, notably the Big Crispy chicken sandwich, continues driving guest traffic.
The consensus mark for this Zacks Rank #2 company’s fiscal 2027 earnings has moved north by 1.4% to $13.18 per share in the past 30 days. EAT surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.21%.
Halozyme Therapeutics offers a compelling near-term investment case anchored by raised 2026 guidance in August 2026. The company now projects full-year royalty revenues of $1.220–$1.245 billion, reflecting 41- 43% year-over-year growth, with non-GAAP EPS guidance raised to $8.65–$9.00. Halozyme has signed five new ENHANZE and Hypercon collaboration agreements year to date, surpassing its full-year goal of three.
The July 2026 Incyte agreement for INCA033989, with options on two additional targets, reinforces platform momentum. A first-ever ENHANZE license for a nucleic acid therapeutic signals meaningful scope expansion. In third-quarter 2026, argenx's ARGX-119 adimanebart entered a Phase 1 subcutaneous bioavailability study with ENHANZE. With zero-to-minimal IRA impact confirmed through at least 2035 and an active $1 billion repurchase program underway, HALO's outlook remains constructive.
The consensus estimate for this Zacks Rank #2 company’s 2026 earnings has been revised upward by 4.3% to $8.73 per share in the past 30 days. HALO’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average negative surprise being 19.12%.
View the Zacks #1 Rank List
Image: Bigstock
Add These 4 GARP Stocks to Your Portfolio to Receive Handsome Returns
Key Takeaways
If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, you can try the growth at a reasonable price or GARP strategy.
The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best of value and growth investing. Fortinet (FTNT - Free Report) , ABB (ABBNY - Free Report) , Brinker International (EAT - Free Report) and Halozyme Therapeutics (HALO - Free Report) are some GARP stocks that hold promise.
GARP Metrics: Mix of Growth & Value Metrics
The GARP strategy seeks to offer an ideal investment by utilizing the best features of value and growth investing. Investors adopting the GARP approach prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.
Growth Metrics
A strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. Hence, growth rates between 10% and 20% are considered to be ideal under the GARP strategy.
Another metric that growth and GARP investors consider is return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Stocks with positive cash flows take precedence under the GARP plan.
Value Metrics
GARP investing prioritizes popular value metrics, the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios.
Using the GARP principle, we ran a screen to identify stocks that should offer solid returns in the near term.
Screening Parameters
Along with the criteria discussed in the above section, we have considered a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Last 5-year EPS & projected 3-5-year EPS growth rates between 10% and 25% (Strong EPS growth history and prospects ensure improving business.)
ROE (over the past 12 months) greater than the industry average (Higher ROE than the industry average indicates superior stocks.)
P/E and P/B ratios less than the M-industry average (P/E and P/B ratios less than that of the industry indicate that the stocks are undervalued)
Here are four stocks from the 10 that made it through the screening process.
Fortinet is well-positioned to capitalize on accelerating enterprise demand for converged networking and security. The company's newly launched SASE Firewall category — anchored by the FortiGate 1200G series with FortiSASE Outpost — addresses growing enterprise sovereignty and AI infrastructure requirements, opening a differentiated market. FortiOS 8.0 reimagines secure networking for the AI era, while the new FortiSOC streamlines security operations through a unified, AI-powered platform.
A strategic collaboration with Intel to co-develop Security Processor 6 strengthens supply chain resilience. Partnerships with NVIDIA's Open Secure AI Alliance, Anthropic, and OpenAI deepen AI security credentials. Moody's recently upgraded Fortinet's credit to A3 — the highest among public cybersecurity companies. Management raised 2026 revenue guidance to $8.02 billion–$8.18 billion, reflecting 19% year-over-year growth.
The Zacks Consensus Estimate for FTNT’s 2026 earnings has moved 0.4% north to $3.42 per share in the past 30 days. This Zacks Rank #1 company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 20.34%.
ABB Ltd. is strategically positioned at the core of global electrification and automation megatrends. Its July 2026 acquisition bid for Rotork, a mission-critical flow control specialist, is set to add approximately 3% to revenues with immediate margin accretion, meaningfully expanding its automation portfolio. An August 2026 minority investment in LevelTen Energy, the world's largest clean energy marketplace, broadens advisory services as industrial decarbonization accelerates.
A September 2026 MoU with Rolls-Royce SMR to deploy automation and electrification solutions for small modular reactors positions ABB at an emerging nuclear frontier. The company-issued full-year 2026 guidance targets low double-digit to low-teens comparable revenue growth alongside year-on-year operational EBITA margin improvement. A record book-to-bill of 1.27 and net debt/EBITDA of 0.3 reinforce near-term momentum.
The consensus estimate for this Zacks Rank #1 company’s 2026 earnings has moved 0.3% north to $3.79 per share in the past 30 days. ABB’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters while missing the same twice, the average negative surprise being 2.05%.
Brinker International appears well-positioned for near-term growth, underpinned by meaningful capital and strategic moves. In July 2026, the company retired $350 million in 8.25% notes, reducing its interest burden. Shortly after, the board authorized $750 million under its share repurchase program, signaling balance sheet confidence and potential shareholder returns. The pending acquisition of 12 Chili's restaurants in Alabama and Mississippi marks a disciplined push toward portfolio expansion.
For fiscal 2027, management guided total revenues of $6.15 billion to $6.27 billion and non-GAAP EPS of $12.60 to $13.40, supported by a 53-week operating year. Chili's menu innovation, notably the Big Crispy chicken sandwich, continues driving guest traffic.
The consensus mark for this Zacks Rank #2 company’s fiscal 2027 earnings has moved north by 1.4% to $13.18 per share in the past 30 days. EAT surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.21%.
Halozyme Therapeutics offers a compelling near-term investment case anchored by raised 2026 guidance in August 2026. The company now projects full-year royalty revenues of $1.220–$1.245 billion, reflecting 41- 43% year-over-year growth, with non-GAAP EPS guidance raised to $8.65–$9.00. Halozyme has signed five new ENHANZE and Hypercon collaboration agreements year to date, surpassing its full-year goal of three.
The July 2026 Incyte agreement for INCA033989, with options on two additional targets, reinforces platform momentum. A first-ever ENHANZE license for a nucleic acid therapeutic signals meaningful scope expansion. In third-quarter 2026, argenx's ARGX-119 adimanebart entered a Phase 1 subcutaneous bioavailability study with ENHANZE. With zero-to-minimal IRA impact confirmed through at least 2035 and an active $1 billion repurchase program underway, HALO's outlook remains constructive.
The consensus estimate for this Zacks Rank #2 company’s 2026 earnings has been revised upward by 4.3% to $8.73 per share in the past 30 days. HALO’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average negative surprise being 19.12%.