For investors looking for a mix of solid increase and sensible pricing, the "Growth at a Reasonable Price" (GARP) method offers a practical middle ground. This method tries to find companies that are increasing their earnings and revenue at a good rate and are also priced at levels that do not require flawless future results. It is a way that avoids the speculative excitement often seen with high-growth stocks while also missing the stagnant companies that can be found at low prices. One instrument to use this method is an "Affordable Growth" stock filter, which looks for equities with good increase basics, acceptable financial condition and earnings, and a price that is not too high.
A recent result from such a filter is BOSTON SCIENTIFIC CORP (NYSE:BSX), a worldwide developer and maker of medical devices. The company's basic profile, as shown in a detailed analysis report, presents an example of the affordable growth idea, presenting notable increase measures next to a price that stays sensible compared to its field.
Growth: A Main Attraction
The main draw of Boston Scientific for a GARP investor is its clear and planned increase. The company's Growth Score of 7 out of 10 is supported by strong past results and good future estimates.
- Past Results: Over the last year, Boston Scientific reported an Earnings Per Share (EPS) increase of 21.51% and Revenue increase of 19.88%. Even more notable is the longer-term pattern, with EPS increasing at an average yearly rate of 26.01% and Revenue at 15.16%.
- Future Estimates: Experts expect this trend to persist, though at a somewhat slower rate. The company is estimated to increase EPS by 13.13% and Revenue by 10.46% yearly in the next few years. This expected increase is still "quite good," as per the analysis, giving a base for future share price gains.
This steady top- and bottom-line increase is key for the affordable growth method, as it supplies the basic engine that can support and possibly exceed the current price multiple.
Valuation: Sensible in Comparison
While increase is needed, its cost is also important. Boston Scientific's Valuation Score of 5 shows a varied but finally sensible view, particularly when seen with a field-specific view. The company's price measures tell a story of high quality not trading at an extreme cost.
- Field Comparison: Although a P/E ratio of 24.30 might appear high alone, it is important to see that BSX is less expensive than about 77% of similar companies in the Health Care Equipment & Supplies field. This relative price is even clearer when looking at Price/Forward Earnings (21.16) and Enterprise Value/EBITDA.
- Increase Adjustment: The analysis points out that Boston Scientific's PEG ratio, which changes the P/E for increase, shows a "correct valuation." Also, the report directly says that "a higher price may be acceptable" given the company's excellent earnings and estimated earnings increase of almost 14%.
For the GARP method, this price context is essential. The filter looks for stocks that are "not too expensive," and BSX meets this by being priced well inside its high-performing field, not by being the absolute least costly stock available.
Supporting Basics: Condition and Earnings
An affordable growth stock cannot depend only on increase; it needs a steady base. Boston Scientific's financial Condition (Score: 6) and Earnings (Score: 8) supply this important support, reducing risk and strengthening the quality of its profits.
- Strong Earnings: The company scores well on earnings, doing better than most of its field. Main positives include:
- A solid Profit Margin of 14.42%, doing better than 91% of field peers.
- Good Return on Equity (11.93%) and Return on Invested Capital (8.35%).
- A growing Operating Margin, now at 19.40%.
- Financial Condition Details: The condition score gives a balanced picture. One side shows the company has very good stability with a healthy Altman-Z score (4.39) and workable debt levels. The other side shows its liquidity ratios (Current and Quick Ratio) are noted as being lower compared to the field. The analysis explains this, proposing that given the company's strong stability and earnings, these ratios do not necessarily point to near-term cash problems but show the details of its asset-heavy business.
These points are important for the filter needs of "acceptable earnings and condition." They make sure the increase being sought is of high quality, made by an effective and basically sound business, not a financially weak one.
Conclusion
Boston Scientific Corp shows the kind of opportunity an "Affordable Growth" filter is made to find. It combines excellent, well-proven increase—both past and estimated—with a price that is sensible inside its field and when thinking about its earnings profile. The strong earnings measures and generally sound financial condition give trust that the increase can continue. This mix makes BSX a notable candidate for investors using a Growth at a Reasonable Price method, looking for companies where the price paid now is backed by real and expected business growth.
Interested in finding more stocks that match this profile? You can use the Affordable Growth filter yourself to see other possible candidates by using this link: Affordable Growth Stock Filter.
Disclaimer: This article is for information only and does not make up financial advice, a suggestion to buy or sell any security, or a support of any investment method. Investors should do their own study and talk with a qualified financial advisor before making any investment choices.
