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4 GARP Stocks That Investors Can Scoop Up for Maximum 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%.
NVDA, MPC, RL and LECO 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. NVIDIA (NVDA - Free Report) , Marathon Petroleum (MPC - Free Report) , Ralph Lauren (RL - Free Report) and Lincoln Electric (LECO - 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 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 16 that made it through the screening process.
NVIDIA's near-term fundamental outlook appears constructive. The company's Vera Rubin platform, now ramping into full production at major cloud partners, including Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and CoreWeave, positions the Data Center segment for continued growth. Third-quarter fiscal 2027 revenue guidance of approximately $108 billion underscores the strength of underlying AI infrastructure demand. The Blackwell GPU architecture's dominance across every MLPerf Training 6.0 benchmark category reinforces its competitive positioning.
Expansion into agentic AI through the purpose-built Vera CPU and the Open Agent Safety Platform — backed by over 100 industry partners — broadens NVIDIA's addressable market. The board's record $235 billion share repurchase authorization and a $1 billion U.S. science commitment further reflect management's confidence in long-term cash generation.
The Zacks Consensus Estimate for NVDA’s fiscal 2027 earnings has moved north by 4% to $9.25 per share in the past 60 days. This Zacks Rank #1 company surpassed the Zacks Consensus Estimate in all four trailing quarters, the average surprise being 5.82%.
Marathon Petroleum presents a near-term investment case rooted in its integrated downstream-midstream model. Its midstream affiliate MPLX — 64%-owned by MPC — targets 12.5% distribution growth for two consecutive years, underpinned by mid-single-digit EBITDA expansion, with growing distributions expected to more than fund MPC's standalone capital and dividend requirements.
MPLX's Harmon Creek III plant, slated for commissioning in second-half 2026, will expand Northeast processing capacity to 8.1 Bcf/day. Globally, refined product demand is projected to outpace net capacity additions through 2030, supporting improved mid-cycle margins. MPC plans to return 100% of excess capital through share repurchases. In August 2026, MPC confirmed achievement of its 2030 GHG goals five years early, and MPLX delivered a 68% methane intensity reduction, highlighting operational efficiency and resilience.
The Zacks Consensus Estimate for MPC’s 2026 earnings has moved north by 31.4% to $61.3 per share in the past 60 days. This Zacks Rank #1 company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average surprise being 49.29%.
Ralph Lauren boasts strengthened strategic levers under its Next Great Chapter: Drive plan in the near term. In September 2026, the company restructured senior leadership — embedding AI strategy within product operations and consolidating real estate and logistics under the CFO — enhancing execution and DTC scaling. Underpinned by 15% AUR growth and Asia revenue momentum, management raised full-year fiscal 2027 constant-currency revenue guidance to approximately 5-6%, with operating margin expansion guided at 60-80 basis points. For the second quarter, 80-100 basis points of margin expansion is targeted, driven by gross margin gains. A dividend increase to $1.00 per share — up from $0.9125 — to be paid out in October 2026 signals confidence in cash generation. Its second-quarter results could offer a near-term fundamental catalyst.
The consensus estimate for RL’s fiscal 2027 earnings has moved north by 0.9% to $18.8 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.74%.
Lincoln Electric's RISE Strategy charts a credible near-term growth path for LECO. Management raised full-year 2026 net sales growth guidance to a low-double-digit rate, reflecting strengthening Americas demand and a record order backlog. The company’s guidance targets price-cost neutrality and mid-20% incremental operating margins in the second half of 2026. Automation generated $229 million in second-quarter 2026 sales and is targeted to grow at twice core welding's pace, positioning LECO in higher-margin segments. CFO Gabe Bruno engaged investors at September 2026 conferences—Jefferies, Morgan Stanley, and D.A. Davidson—underscoring leadership confidence. Capital discipline anchors the case. Management targets 100% cash conversion, capex is guided to be $110–$130 million, and the board declared a $0.79 quarterly dividend to be paid out on Oct. 15, 2026.
The consensus estimate for LECO’s 2026 earnings has moved north by 0.6% to $11.2 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.92%.
View the Zacks #1 Rank List
Image: Bigstock
4 GARP Stocks That Investors Can Scoop Up for Maximum 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. NVIDIA (NVDA - Free Report) , Marathon Petroleum (MPC - Free Report) , Ralph Lauren (RL - Free Report) and Lincoln Electric (LECO - 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 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 16 that made it through the screening process.
NVIDIA's near-term fundamental outlook appears constructive. The company's Vera Rubin platform, now ramping into full production at major cloud partners, including Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and CoreWeave, positions the Data Center segment for continued growth. Third-quarter fiscal 2027 revenue guidance of approximately $108 billion underscores the strength of underlying AI infrastructure demand. The Blackwell GPU architecture's dominance across every MLPerf Training 6.0 benchmark category reinforces its competitive positioning.
Expansion into agentic AI through the purpose-built Vera CPU and the Open Agent Safety Platform — backed by over 100 industry partners — broadens NVIDIA's addressable market. The board's record $235 billion share repurchase authorization and a $1 billion U.S. science commitment further reflect management's confidence in long-term cash generation.
The Zacks Consensus Estimate for NVDA’s fiscal 2027 earnings has moved north by 4% to $9.25 per share in the past 60 days. This Zacks Rank #1 company surpassed the Zacks Consensus Estimate in all four trailing quarters, the average surprise being 5.82%.
Marathon Petroleum presents a near-term investment case rooted in its integrated downstream-midstream model. Its midstream affiliate MPLX — 64%-owned by MPC — targets 12.5% distribution growth for two consecutive years, underpinned by mid-single-digit EBITDA expansion, with growing distributions expected to more than fund MPC's standalone capital and dividend requirements.
MPLX's Harmon Creek III plant, slated for commissioning in second-half 2026, will expand Northeast processing capacity to 8.1 Bcf/day. Globally, refined product demand is projected to outpace net capacity additions through 2030, supporting improved mid-cycle margins. MPC plans to return 100% of excess capital through share repurchases. In August 2026, MPC confirmed achievement of its 2030 GHG goals five years early, and MPLX delivered a 68% methane intensity reduction, highlighting operational efficiency and resilience.
The Zacks Consensus Estimate for MPC’s 2026 earnings has moved north by 31.4% to $61.3 per share in the past 60 days. This Zacks Rank #1 company surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing the same once, the average surprise being 49.29%.
Ralph Lauren boasts strengthened strategic levers under its Next Great Chapter: Drive plan in the near term. In September 2026, the company restructured senior leadership — embedding AI strategy within product operations and consolidating real estate and logistics under the CFO — enhancing execution and DTC scaling. Underpinned by 15% AUR growth and Asia revenue momentum, management raised full-year fiscal 2027 constant-currency revenue guidance to approximately 5-6%, with operating margin expansion guided at 60-80 basis points. For the second quarter, 80-100 basis points of margin expansion is targeted, driven by gross margin gains. A dividend increase to $1.00 per share — up from $0.9125 — to be paid out in October 2026 signals confidence in cash generation. Its second-quarter results could offer a near-term fundamental catalyst.
The consensus estimate for RL’s fiscal 2027 earnings has moved north by 0.9% to $18.8 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.74%.
Lincoln Electric's RISE Strategy charts a credible near-term growth path for LECO. Management raised full-year 2026 net sales growth guidance to a low-double-digit rate, reflecting strengthening Americas demand and a record order backlog. The company’s guidance targets price-cost neutrality and mid-20% incremental operating margins in the second half of 2026. Automation generated $229 million in second-quarter 2026 sales and is targeted to grow at twice core welding's pace, positioning LECO in higher-margin segments. CFO Gabe Bruno engaged investors at September 2026 conferences—Jefferies, Morgan Stanley, and D.A. Davidson—underscoring leadership confidence. Capital discipline anchors the case. Management targets 100% cash conversion, capex is guided to be $110–$130 million, and the board declared a $0.79 quarterly dividend to be paid out on Oct. 15, 2026.
The consensus estimate for LECO’s 2026 earnings has moved north by 0.6% to $11.2 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 3.92%.