Growth stocks continue to be my favourite type of share, and that’s why I’m considering the investment outlooks of Diageo plc (LON:DGE) (DGE.L), HSBC Holdings plc (LON:HSBA) (HSBA.L), Fevertree Drinks PLC (LON:FEVR) (FEVR.L), Taylor Wimpey plc (LON:TW) (TW.L) and Burberry Group plc (LON:BRBY) (BRBY.L).
Diageo appears to have a bright future in my opinion. The company has exposure to a number of fast-growing consumer markets across the globe, and this could help to catalyse its future earnings. With a range of products in a number of key categories, Diageo seems to offer diversity as well as a relatively strong risk to reward ratio. Therefore, while not the cheapest share around, I feel it could post high returns.
HSBC is one of my top picks in the banking sector. I think it could be a surprisingly strong growth stock, with its exposure to China having the potential to boost its EPS growth rate. Demand for financial services in Asia is expected to rise at a fast pace in future, which is good news for HSBC after its pivot to the region. With a 4%+ dividend yield, I believe its total return prospects could be high.
Fevertree Drinks is becoming a household name across the globe, with it continuing to win new customers as the beverages industry undergoes further premiumisation. The company seems to have a strong degree of customer loyalty and this may provide it with pricing power alongside the scope to sell a higher volume of its products. With what seems to be a sound strategy, I’m optimistic about the investment prospects of Fevertree.
Taylor Wimpey is one of my favourite stocks in the housebuilding sector. The company has been able to improve its balance sheet while also delivering rising dividends and profitability. Sure, the housing market has been buoyant in recent years, but it may continue to be so in the medium term. Low interest rates and more government stimulus through the Help to Buy scheme could create improving trading conditions for Taylor Wimpey.
Burberry is seeking to improve its current business model. The company is reducing costs in order to become more efficient, while also focusing on the luxury segment. This could allow the business to expand sales and margins in my view. With Burberry operating in a number of fast-growing consumer markets across the world, it could benefit from a continued tailwind in future years.