GARP Stocks US — Growth at a Reasonable Price on NYSE & NASDAQ

GARP (Growth at a Reasonable Price) is a strategy that combines growth investing's focus on earnings expansion with value investing's discipline on valuation. Rather than buying any growing company or any cheap company, GARP seeks those where the growth rate is meaningful and the P/E multiple is below what the growth rate justifies. The PEG ratio — P/E divided by earnings growth rate — is the central GARP metric.

Peter Lynch considered PEG below 1.0 to represent undervalued GARP territory — you're paying a P/E lower than the growth rate. PEG of 1.0 is 'fairly valued' GARP. PEG of 1.5 is 'stretched but potentially acceptable' for high-quality businesses. Above 2.0 is generally too expensive for a GARP framework. At this screen's thresholds (P/E < 20, growth > 10%), the implied PEG maximum is 2.0.

Pure value investing (Benjamin Graham style) focuses exclusively on cheapness — low P/E, low P/B, without requiring growth. A company growing at 2% with P/E of 10 is a value stock. GARP requires meaningful earnings growth (above 10%) alongside reasonable valuation — a slow grower at a low multiple doesn't qualify for GARP. GARP explicitly seeks businesses where growth and reasonable price coexist.

Pure growth investing (e.g., CANSLIM, momentum) often accepts any P/E multiple for high enough growth — the faster the better, price secondary. GARP imposes a valuation discipline: P/E must be below 20 (or below the growth rate in PEG terms). This discipline specifically excludes expensive growth stocks trading at P/E of 50–100×, even if growth is exceptional. GARP investors are growth-oriented value investors.

Technology (mature software and IT services with consistent 15-20% growth at moderate multiples), healthcare (diversified pharma and medtech), financial services (well-managed banks growing earnings steadily), and consumer discretionary (expanding brands). The GARP opportunity is strongest where sector pessimism has depressed multiples for quality growth companies that continue to compound.

Yes, with caveats. In low-rate environments (0-2% risk-free rates), P/E of 20 is quite reasonable as equity competes against very low bond yields. In higher-rate environments (4-5% risk-free rates), P/E of 20 faces competition from risk-free alternatives — the equity risk premium becomes thinner. The P/E threshold remains fixed in this screen, but its attractiveness is inversely related to prevailing risk-free interest rates.

This screen uses 10% as the minimum threshold — roughly 1.3× the long-run average S&P 500 earnings growth rate of 7-8%. Lynch himself preferred 15-30% earnings growth for his favorite GARP situations. The 10% minimum captures the full GARP opportunity set; filtering for 15%+ growth within results identifies the higher-conviction GARP candidates Lynch specifically sought.

PEG = P/E Ratio / Earnings Growth Rate (%). For a stock with P/E of 15 and earnings growth of 20%, PEG = 15/20 = 0.75 — strong GARP value. For P/E of 18 and growth of 12%, PEG = 18/12 = 1.5 — moderate GARP. The P/E and earnings growth data are both visible in the screen results, allowing easy manual PEG calculation or sorting by the ratio for comparison.

Quality investing focuses on business characteristics — ROE, ROCE, margins, competitive moats — as the primary filter. GARP focuses on the valuation-growth relationship. The overlap is significant: quality businesses with durable competitive advantages tend to sustain the earnings growth GARP requires. The ROE filter in this screen creates a quality-GARP hybrid — finding growth-value stocks that also demonstrate genuine business quality.

Yes, better than pure growth and comparably to value. GARP stocks' reasonable valuations (P/E below 20) limit multiple compression risk during market sell-offs. Their earnings growth provides a fundamental floor as market valuations contract. During bear markets, GARP stocks often fall less than high-P/E growth stocks and recover faster than low-quality value stocks — making them a balanced all-weather equity exposure.