Investments that have enjoyed long-term success share at least one thing in common -- growth. Very few companies have produced good returns for shareholders without also increasing their earnings.

Dividends aside, investors reap their gains when a company's stock price goes up. The stock price is typically driven by two levers: earnings, and the multiple that investors are willing to pay for those earnings. Since earnings multiples tend to fluctuate within a certain range, long-term investors should have a keen focus on the company's ability to increase its income.

Does that seem too simple? Sometimes, keeping it simple can be a good plan. After all, as Third Avenue's Marty Whitman put it: "Based on my own personal experience -- both as an investor in recent years and an expert witness in years past -- rarely do more than three or four variables really count. Everything else is noise."

With that in mind, I've kept it simple, digging up five stocks that analysts expect will notch long-term earnings growth of 10% or better. I've also pulled up the CAPS rating for each stock, to show what the 130,000 members of the Motley Fool's CAPS community think of the company's prospects.


Expected growth

Forward P/E (FY09)

CAPS rating (Max 5)

Las Vegas Sands (NYSE:LVS)




SandRidge Energy (NYSE:SD)








Stryker (NYSE:SYK)








Source: Capital IQ, a division of Standard & Poor's, Yahoo! Finance, and CAPS.

Wall Street analysts aren't known for their supernaturally accurate forecasting, so not all of these estimates may pan out. However, this list may be a good place to dig in for further research. I'll get you started with some thoughts on Las Vegas Sands and Stryker.

Feeding the growth
Wall Street seems to think that both Las Vegas Sands and Stryker will post some pretty compelling growth in the years to come. But that may be where the two companies' similarities end.

Las Vegas Sands is a casino powerhouse that owns the Venetian and the Palazzo in Las Vegas, along with a few resorts across the Pacific in Macau. A rebound in the number of people heading out to Vegas for a shot at Lady Luck would certainly help the company, but it has plenty of other plans in place to help boost growth.

Currently, Sands is charging ahead on projects in both Singapore and Pennsylvania that would not only bring new income streams, but also further diversify the company geographically. And if the economy does cooperate, there are at least three currently postponed projects that Sands will be ready to crank up.

Stryker, meanwhile, relies a little less on consumer confidence, and a little more on people's desire to live pain-free. As a major player in the joint-replacement industry, Stryker will score its growth by battling competitors such as Zimmer (NYSE:ZMH) for additional market share and continuing to build its medical and surgical equipment business.

Calling all bulls
If analysts are expecting both companies to deliver strong growth, why is Stryker a five-star pick on CAPS, while Las Vegas Sands languishes at two stars? That seems to boil down to two things -- balance-sheet strength and predictability.

Over the past few years, along with competitors like MGM Mirage (NYSE:MGM), Las Vegas Sands gulped down easily available debt the way international competitive eating sensation Takeru Kobayashi devours hot dogs. The company certainly added some snazzy properties, but it's also ended up with more than $10 billion of debt against its $4.3 billion in shareholder equity. At the same time, investors don't know what to expect from the usually solid gaming market, now that casino revenues are taking an unprecedented plunge.

Stryker, on the other hand, has a balance sheet like a bomb shelter. With more than $2 billion in cash and marketable securities and almost no debt, the company should be well-prepared to weather almost any economic storm. It's also less likely that we'd see a drastic dropoff in Stryker's revenue. While it may be pretty easy to put off a trip to Las Vegas, replacing a shattered hip isn't normally something that ends up on the "wait until the recession's over" list.

But don't take it from me. Check out what CAPS All-Star waterflea has to say about Stryker's prospects:

I'm 56. My hips are fine, but I'm watching friends all over trade in their OE hips. Name your metric, Stryker looks strong. The only risk is competition, and that just doesn't scare me enough. Long-term, this one is a winner.

But what do you think?
Do these stocks have what it takes to post solid growth in this economy? Or have analysts been too optimistic? Currently, there are more than 130,000 members of our free CAPS community sharing their opinions on thousands of stocks. Head over to CAPS and let the community know what you think of Stryker or Las Vegas Sands, or any of the other stocks listed above.

Related CAPS Foolishness:

eBay is a Stock Advisor selection. eBay and Stryker are Inside Value selections, and the Fool owns shares of Stryker. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out the stocks he's keeping an eye on by visiting his CAPS page or you can connect with him on Twitter @KoppTheFool. The Fool's disclosure policy likes to keep it simple -- make your disclosure properly, and you don't get put in the dreaded triangle choke.