Here’s why Santos Ltd and Crown Resorts Ltd look to be 2 attractively valued growth stocks

One of the best ways to secure a richer future is through reliable growth stocks. Here are two stocks that have large expansion plans now, yet over time could become future income stocks as well. They are Santos Ltd (ASX: STO) and Crown Resorts Ltd (ASX: CWN).

If you want to build long-term wealth through stocks, then these two may be good additions to your retirement portfolio.

Santos has LNG developments in South Australia and Queensland which will be supplying gas to the LNG export market due to kick off next year with its GLNG project. Also, the company is part-owner of the PNG LNG project which is currently shipping LNG and ramping-up production over the next several years. Together, Santos is expecting impressive revenue growth from the two projects.

Once started, these will be operating for many years to come. The long-term income streams are also good for the company to fund new developments for ongoing business growth.

The stock has a yield of 2.4% fully franked. Its price-earnings ratio is 22, yet analysts’ estimates have earnings possibly increasing an average 39% annually over the next two years.

Crown Resorts, the integrated resort and casino operator headed by James Packer, is currently developing casinos in Macau and the Philippines through its joint venture company Melco Crown Entertainment Ltd (NASDAQ: MPEL). Next it plans to create a VIP gaming venue along with a six-star hotel in Sydney. Possibly it may also build in Brisbane and Sri Lanka and has recently purchased a casino development site along the Las Vegas Strip.

Analysts’ estimates put earnings to grow at a decent rate over the next two years, but as new venues are completed, it could spur on further growth in the U.S. and Asia.

The stock yields 2.6% partially franked. It is around $15 a share, down from its March highs of about $18. The market may be in a “wait and see” mode about how the proposed developments will be funded and completed. This could be an opportunity to start a position and follow the progress.

For more immediate impact, I would prefer Santos. Over the next few years both LNG projects should be up to full production capacity. Crown Resorts may require a longer time horizon, but it is probably more attractively valued now.

There is also one other stock with similar growth potential that The Motley Fool has dubbed “The Top Stock of 2014-2015”. This small-cap stock has a reliable growth record and could be an even better stock pick for dividends and share price appreciation.

The Motley Fool’s top analyst team has written a free report which they’re sharing with all interested investors.

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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