Is McKesson (MCK) a Solid Growth Stock? 3 Reasons to Think "Yes"

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. However, it isn't easy to find a great growth stock.By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.Our proprietary system currently recommends McKesson (MCK) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).Here are three of the most important factors that make the stock of this prescription drug distributor a great growth pick right now.Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.While the historical EPS growth rate for McKesson is 16%, investors should actually focus on the projected growth. The company's EPS is expected to grow 12.6% this year, crushing the industry average, which calls for EPS growth of 1.3%.Impressive Asset Utilization RatioAsset utilization ratio -- also known as sales-to-total-assets (S/TA) ratio -- is often overlooked by investors, but it is an important indicator in growth investing. This metric exhibits how efficiently a firm is utilizing its assets to generate sales.Right now, McKesson has an S/TA ratio of 4.95, which means that the company gets $4.95 in sales for each dollar in assets. Comparing this to the industry average of 0.72, it can be said that the company is more efficient.While the level of efficiency in generating sales matters a lot, so does the sales growth of a company. And McKesson looks attractive from a sales growth perspective as well. The company's sales are expected to grow 13% this year versus the industry average of 1.1%.Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.The current-year earnings estimates for McKesson have been revising upward. The Zacks Consensus Estimate for the current year has surged 0.1% over the past month.Bottom LineWhile the overall earnings estimate revisions have made McKesson a Zacks Rank #2 stock, it has earned itself a Growth Score of A based on a number of factors, including the ones discussed above.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.This combination indicates that McKesson is a potential outperformer and a solid choice for growth investors.Don’t Miss Out on These Stocks Before you make your next investing move, we have a free report that highlights the %%CTA_TEXT%% to buy.Our experts at Zacks Investment Research hand-selected these stocks for their eye-opening growth projections.Since 1988, our stock picks have more than doubled the S&P 500 with an average gain of +23.89% per year using the Zacks Rank stock-rating system.Register now to see the %%CTA_TEXT%%.7 best stocksWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report McKesson Corporation (MCK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks