What small-cap stocks lack in size they typically make up for in growth potential. That's why it would behoove investors who are seeking to increase their net worth over the long term to add a few small-cap stocks to their portfolio. Three that caught our eye as having compelling growth potential in the years ahead are Lumber Liquidators (NYSE:LL), U.S. Concrete (NASDAQ:USCR), and Summit Midstream Partners (NYSE:SMLP)

Don't be floored by its drop

Rich Duprey (Lumber Liquidators): If all you know about Lumber Liquidators is what you heard about the company during the so-called Chinese formaldehyde "scandal" and you've been leery of buying in, you're missing out on an exceptional company and opportunity.

The motivational quote "Big journeys begin with small steps" appears behind torn paper.

Image source: Getty Images.

Lumber Liquidators got caught up in a 60 Minutes report of its manufacturing processes, which supposedly exposed owners of its laminate flooring to high levels of formaldehyde off-gassing. Driven by noted short-seller Whitney Tilson, the crisis ended up costing it several top executives, caused it to pay fines to settle the matter, and saw its stock plummet in the aftermath.

Yet there was a lot less fire than smoke to the issue, and Lumber Liquidators has been on the mend since. As the leading national flooring specialist, Lumber Liquidators recently hit a 52-week high of $30 a share. And despite pulling back almost 20% from that point, the stock has still doubled from its lows.

Shares had plunged sharply following a wider-than-expected quarterly loss in early May, but then rallied again to hit those new highs after receiving analyst upgrades and then soon began peeling back those gains. I suspected last month it was due for a correction, but that the long-term outlook was still quite bright. As I wrote, "an improving economy, a housing market that looks healthy, a customer base that's starting to return to its stores, and analyst upgrades, all point to a company that's growing once more." 

All that remains true, and this small-cap stock is still offering attractive valuations, even at these still-elevated levels. Quality, affordable flooring is always going to be a big seller and Lumber Liquidators is the best at what it does. It also trades at a fraction of its sales and analysts still have it pegged for robust earnings growth over the next five years. I expect we'll be seeing Lumber Liquidators nailing down additional stock price increases in the years to come.

Building a better future

Daniel Miller (U.S. Concrete): When looking for exciting growth stocks, you probably didn't have U.S. Concrete at the top of your list. The company serves major construction markets across the nation in two primary business segments: ready-mixed concrete and aggregate products (what goes into the concrete). U.S. Concrete exited the Great Recession and its ensuing bankruptcy with a reshaped business that has since grown quickly, both organically and through acquisitions, and is now well positioned in key markets across America.

What's great about the company is its footprint in key markets to drive future top-line growth. It's the top provider in New York Metro, western Texas, and the San Francisco Bay Area, and the second-largest provider in Dallas and third-largest in D.C. and Dulles Corridor. Between the East Coast financial services and government projects, technology companies on the West Coast, and a slew of diversified projects in the south, it has inked a number of high-margin contracts due to the complex nature of these projects (such as major airports, corporate campuses and massive high-rise apartments).

U.S. Concrete's management team has also done a phenomenal job of bolting on accretive acquisitions to help boost top-line growth. In fact, its adjusted EBITDA over the trailing 12 months ending on March 31 was 66% generated by organic growth, but a welcome 34% chunk from acquisitions completed since only 2014. Management plans to keep a disciplined acquisition strategy including expanding within existing regional markets and surrounding areas.   

While there's much uncertainty regarding President Trump's infrastructure plans, U.S. Concrete believes the potential policies will extend the current construction cycle which will bolster the company's near-term prospects. With a proven track record of organic growth and bolt-on acquisitions, the company is positioned to do well regardless, but any policy that spurs infrastructure spending will be a welcome bonus. 

A mountain of income and growth lies ahead

Matt DiLallo (Summit Midstream Partners): Energy midstream companies can be excellent investments to hold for the long term. That's because they typically generate steady fee-based cash flow from pipelines and processing plants, the bulk of which they distribute back to investors. Meanwhile, with energy demand continuing to grow, these companies should have no shortage of opportunities to expand their fee-generating portfolio.

That said, most midstream companies are gargantuan in size, which limits their ability to grow at a rapid rate. However, that's not the case for Summit Midstream Partners, which only formed a few years ago and still has a sub-$2 billion market cap. Because it's earlier in its life cycle, the growth-oriented master limited partnership could deliver healthy growth for investors in the years ahead, which makes its generous 9.8% distribution even more appealing.

That has already been the case over its short history. Since 2013, for example, the company has grown adjusted EBITDA by a 21.5% compound annual growth rate, which fueled 20.4% compound annual growth in its distribution to investors. Driving that rapid growth was the company's focus on buying and building assets in briskly growing shale plays. 

While the oil market downturn has slowed the company's organic growth opportunity slate over the past year, that should pick up as producers start drilling more wells, especially since Summit operates in all of America's fastest growth shale plays. In fact, according to one estimate, energy companies in the U.S. will need to invest $333 billion in building natural gas infrastructure through 2035. Meanwhile, with less leverage and more liquidity than most peers, the company has access to capital so it can buy more assets to expand its portfolio and opportunity set.  

This upside potential, when compared to Summit Midstream Partners' smaller size, suggests it could grow earnings at a rapid pace in the years ahead, making it a compelling small-cap midstream investment to own for the long term.