3 more growth stocks I'd buy with $10,000 today

REA Group Limited (ASX:REA) and Bapcor Ltd (ASX:BAP) are 2 of 3 growth stocks I'd buy today.

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Over the long-term it is usually growth stocks that provide the best returns for investors. This is because they're keeping more of the profit and re-investing it at a high rate of return.

After two or more years of business growth the share price will hopefully have grown far in excess of what the dividend could have provided to the investor.

However, it's not just a case of picking any growth stock, it has to be the right one at the right price. Here are three growth stocks that I think are worth considering:

REA Group Limited (ASX: REA)

REA Group is the owner of a global network of property sites including Realestate.com.au. It has market leading platforms in multiple countries and benefits from a wonderful effect where the buyers and sellers will go to the biggest website first.

This dominant position allows REA Group to increase the price of its service and not suffer loss of market share. It recently increased the price by 10% and is likely to increase prices again over the next two years.

REA Group is trading at 33x FY17's estimated earnings with a grossed-up dividend yield of 2.15%.

Bapcor Ltd (ASX: BAP)

Bapcor is Australia's largest auto parts wholesaler and distributor. It owns automotive brands such as Burson Auto Parts, Autobarn and Midas.

Whether cars are electric or automated, they will still have parts that suffer wear and tear which will require replacements. Or perhaps the owner would want to make some upgrades and go to one of Bapcor's businesses for the parts.

Bapcor has quite a defensive profile because car parts are always breaking. In economic down times car owners would try to make their car last longer so Bapcor could see an increase of sales during that time.

It's currently trading at 30x FY17's estimated earnings with a grossed-up dividend yield of 3%.

1300 Smiles Limited (ASX: ONT)

1300 Smiles owns and operates dental facilities and it is expanding through acquisitions as well as opening up new dental practices.

The company has been steadily growing its network which has allowed it to grow the share price by 35% over the last five years to $7.30.

It has come up with an interesting proposition called the '$1 a Day Care Plan' which makes dental visits and associated costs much more affordable. This is a good tactic to create recurring revenue and frequent customers.

1300 smiles is trading at 23x FY16's earnings with a grossed-up dividend yield of 4.45%.

Foolish takeaway

There is a lot to like about all three businesses and in five years time it's likely that all three will be materially higher than where they are now. At the current prices, Bapcor could be the best value, but all three are good businesses in my eyes. For another great growth share you should check out this stock.

Motley Fool contributor Tristan Harrison has no position in any stocks mentioned. The Motley Fool Australia owns shares of Bapcor. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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