- Growth companies have the potential to grow their earnings fast.
- Investors look to them for good returns.
- Growth companies usually don’t give dividends.
Growth stocks improve their earnings and sales faster than other companies. Growth companies can be identified through their business strategy, product lines, and expansion plans. They can be in large, medium, or small caps and can be traded on any exchange. Usually, they don’t pay dividends as they like to plow back cash for their growth.
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Against this background, let’s look at 4 growth companies listed on the NZX.
Serko Limited (NZX:SKO)
SKO specialises in travel and expense technology solutions. It has a travel management app called Zeno using predictive workflows. The company’s market cap is to the tune of NZ$616.9 million. Recently, on December 17, it raised NZ$8.3 million via its retail offer. The Company plans to redefine the business of travel and is likely to grow as New Zealand opens its borders from April.
Also Read: Serko (NZX:SKO): What led to revenue increase in half-year results
On 28 January, the stock was trading flat at NZ$5.35, at the time of writing.
Vista Group International Limited (NZX: VGL)
VGL is a technology solutions provider to the film industry worldwide. On 21 January, the Group tied up with Odeon Cinemas Group operating in Spain and Portugal. It will implement a Vista solution for Cinesa Cinemas in both these locations. The Group saw a major recovery in recurring revenue and receivables in 2HFY21.
Its outlook for 2022 is optimistic. The Group expects to attain its full-year guidance of NZ$95-100 million. Its EBITDA expectations are also aligned with its goals.
On 28 January, the stock was trading down by 3.38% at NZ$2, at the time of writing.
Infratil Limited (NZX:IFT)
It’s an NZ-based infrastructure company that invests in growth sectors such as renewable energy, airport, and data and social infrastructure. Recently, IFT reported that it had increased its stake in CDC Data Centres by 15%. Its total stake of 48% CDC was estimated to be around AU$669 billion and AU$2.862 billion. This increase in stake reflected an increase in customer interest and it is estimated to grow.
Recently, IFT pledged US$233 million in Gurin Energy, which is a new renewable energy platform.
On 28 January, the stock was trading flat at NZ$7.70
EROAD Limited (NZX:ERD)
ERD is a technology company that provides technology solutions to handle vehicle fleets and improve driver safety.
On 24 January, the Company released its update for the three months ended on 31 December 2021. Key points included: Total contracted units grew by 53% partly due to the Coretex acquisition. The acquisition was completed successfully, the integration is well on track and there are expected opportunities in North America for Enterprise units and increased growth in New Zealand due to the introduction of the Enterprise fleet.
On 28 January, the stock was trading down by 1.14% at NZ$4.35, at the time of writing.
Bottom line: Growth stocks have a better price-to-earnings ratio and they have a strong business plan.