10 Best High Growth Stocks Outside Big Tech

6. Welltower Inc. (NYSE:WELL)

EPS Growth Over the Next 5 Years: 42.20%

Hedge Fund Holders: 54

Welltower Inc. is the largest owner of senior home communities, and its senior housing operational portfolio now accounts for over 70% of same-store NOI. During the third quarter, normalized FFO increased by 24.6% to $1.67 per share, while total portfolio same-store NOI increased 15.8%. The operating portfolio’s same-store NOI increased by 21%, the 16th consecutive quarter above 20%, driven by 320 basis points of occupancy growth and a 5.3% increase in revenue per occupied room.

Valuation is the main debate. Welltower is trading at 68.90x forward earnings, a premium multiple reflecting its extraordinarily strong FFO growth, high-quality senior-housing assets, and expectations of continuing occupancy and pricing advances. Normalized FFO is a more meaningful earnings measure for REITs than GAAP net income; hence, the company increased full-year normalized FFO expectations by $0.10 at the midpoint to $6.50, representing around 23% growth.

In addition, the company has made aggressive capital deployments. Welltower has closed or contracted $21.0 billion in pro rata gross investments this year, with $13.3 billion completed through September 30 and another $7.7 billion closed or under contract after the quarter ended. Management expects these investments to help future FFO growth, though they also increase integration and capital-allocation requirements.

Shares fell following the report, indicating that expectations were already high. Triple-net same-store NOI increased only 4.2%, and the growth story is dependent on sustained occupancy improvements and open capital markets to fund the acquisition pace. These are the same factors that support the bull case: if occupancy keeps rising and Welltower continues to deploy capital at attractive returns, its premium valuation could be supported by continuous FFO growth. For a closer look at that thesis, see what makes Welltower a bullish bet.

5. Vale S.A. (NYSE:VALE)

EPS Growth Over the Next 5 Years: 46.62%

Hedge Fund Holders: 39

Vale S.A. is one of the world’s top iron ore producers, and is growing into copper and nickel through Vale Base Metals. In the second quarter, iron ore production reached 84.3 million tons, the highest since 2018, with copper recording its best second quarter in nine years. Base metals EBITDA increased 79% to $1.29 billion, accounting for three out of every ten dollars of segment EBITDA, while iron ore contributed $3.06 billion. Moreover, in October, Vale sought to establish a Panda bond program in China worth up to 10 billion yuan, which provided roughly half of second-quarter revenue.

That dependence is also a risk. Back in August, Chinese crude steel output declined 3.7% from the previous year, and iron ore prices followed suit. Iron ore costs also rose with the stronger Brazilian real. See how Vale is strengthening its relations with China, including a potential yuan bond.