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Your instant 5-share growth portfolio

To find fast growing companies generally means looking to the small-cap sector and identifying some of the best mid-cap stocks, as its these up-and-coming businesses which have the best potential for offering long-term, above average growth rates to shareholders.

Here are five smaller companies which according to consensus estimates provided by Morningstar are expected to grow their earnings per share (EPS) from the current financial year (FY) to FY 2015 at a fast rate.

1)      Domino’s Pizza Enterprises Ltd. (ASX: DMP) is forecast to grow EPS from 53.2 cents per share (cps) to 64 cps and dividends from 37.4 cps to 45.2 cps. This implies growth rates of 20% and 21% respectively for earnings and dividends.

 

2)      Perpetual Limited (ASX: PPT) is forecast to grow EPS from $2.54 to $3.11 and to increase the dividend paid from $1.88 to $2.61. On these estimates, growth rates of 22.5% and 39% are implied.

 

3)      REA Group Limited (ASX: REA) is forecast to grow earnings from $1.15 to $1.52 and boost its dividend from 57 cents to 74.1 cents. On these assumptions, growth in earnings and dividends of 32% and 30% respectively are implied.

 

4)      Sirtex Medical Limited (ASX: SRX) is forecast to grow EPS from 39.4 cps to 52.1 cps and dividends from 14.2 cps to 18 cps in FY 2015. This implies growth rates of 32% and 27% respectively.

 

5)      Carsales.com Limited (ASX: CRZ) is forecast to see a rise in EPS from 40.2 cps to 47.1 cps implying growth of 17%; meanwhile dividends are expected to grow from 32.3 cps to 37.6 cps implying growth of 16%.

 

Foolish takeaway

Paying up for growth and quality is one thing but overpaying is something entirely different. Taking the time to compile a watchlist of fast growing stocks you would like to own and the price you are prepared to pay is a good way to be prepared for when opportunities present themselves to buy the stocks at an attractive price.

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Motley Fool contributor Tim McArthur owns shares in Perpetual Ltd.

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