
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. FortinetFTNT, Brinker InternationalEAT, Lincoln ElectricLECO and Lam ResearchLRCX 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 find 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 12 that made it through the screening process.
Fortinet's investment case rests on a broadening product portfolio and accelerating strategic momentum. The company raised its full-year 2026 revenue growth guidance to 19%, with full-year billings guided between $9.35 billion and $9.55 billion. The July 2026 launch of the FortiGate 1200G with FortiSASE Outpost introduces a convergent SASE Firewall architecture, a newly defined market opportunity addressing hybrid deployment demands.
Concurrently, the expanded FortiEndpoint platform consolidates AI visibility, data security, and endpoint protection into a single agent and license, deepening wallet share per customer. In August 2026, Fortinet acquired Virtue AI to enhance its Security Fabric with agentic AI runtime protection, directly addressing the fast-growing AI security segment. Fortinet Federal's CMMC Level 2 certification opens the U.S. government market.
The Zacks Consensus Estimate for FTNT's 2026 earnings has moved north by 8.3% to $3.40 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 20.34%.
Brinker Internationalenters fiscal 2027 with a clear growth runway, underpinned by company-issued guidance targeting revenues of $6.15 billion to $6.27 billion and adjusted EPS of $12.60 to $13.40. Chili's brand momentum visibly accelerated in July 2026, powered by the sustained success of the Big Crispy chicken sandwich.
On July 16, the company redeemed $350 million in 8.25% notes, lowering its interest expense profile. Its board then expanded the share repurchase authorization to $750 million in August, reflecting management's confidence in free cash flow generation. A 60-to-80 restaurant reimage plan, mid-single-digit same-store sales guidance, and expected positive traffic at Chili's further support the outlook. An Investor Day set for Sept. 17, 2026 could serve as an additional near-term catalyst.
The Zacks Consensus Estimate for EAT's fiscal 2027 earnings has moved north by 4.8% to $13.01 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.21%.
Lincoln Electricis well-positioned for near-term outperformance, driven by converging demand and strategic catalysts. The company's RISE framework targets revenues exceeding $6 billion by 2030, peak adjusted operating margins above 20%, and mid-teens EPS CAGR. For the second half of 2026, management anticipates continued margin improvement, with mid-20% incremental operating margins and a neutral price-cost environment. Improved demand and capital spending across the Americas and Asia Pacific are broadening the growth base. The July 2026 declaration by the board of a 79 cents per share quarterly dividend reinforces steady shareholder returns, while the company's scheduled September 2026 investor engagements signal management's confidence in execution. With 71 manufacturing facilities across 20 countries and proprietary automation capabilities, Lincoln Electric's infrastructure supports durable earnings growth.
The consensus estimate for LECO's 2026 earnings has moved north by 3% to $11.16 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 3.92%.
AI-driven semiconductor demand is structurally reshaping Lam Research's near-term growth outlook. The company's guidance for the September 2026 quarter projects revenues of $8.10 billion and a non-GAAP operating margin of 39.5%, reflecting strong sequential momentum. Deferred revenues of $2.43 billion at June quarter-end signal a healthy forward demand pipeline supporting continued execution.
In August 2026, Lam Research announced plans to invest more than $3 billion over the next five years to expand its global R&D lab network, with experiment capacity targeted to grow by over 50%. Groundbreaking of a new 120,000-square-foot Oregon facility marks the investment's first concrete milestone. A 27% quarterly dividend hike to $0.33 per share further signals management's confidence in sustained cash generation and long-term shareholder returns.
The consensus estimate for LRCX's 2026 earnings has moved north by 18.7% to $9.33 per share in the past 30 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.12%.
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Brinker International, Inc. (EAT) : Free Stock Analysis Report
Lam Research Corporation (LRCX) : Free Stock Analysis Report
Lincoln Electric Holdings, Inc. (LECO) : Free Stock Analysis Report
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
