Investments that have been successful over the long term almost assuredly share at least one thing in common -- growth. You'll be able to find very few companies that have been unable to increase their earnings and yet still produce good returns for shareholders.

Think about it this way: 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 earnings.

Does it seem too simple? Maybe keeping it simple is a good plan sometimes. After all, as Third Avenue's Marty Whitman has 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 and dug 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 135,000-member Motley Fool's CAPS community thinks of the company's prospects.


Expected growth

Forward P/E (FY2010)

CAPS rating
(5 max)





Nuance Communications (NASDAQ:NUAN)




American Oriental Bioengineering (NYSE:AOB)




Joy Global (NASDAQ:JOYG)




Marvell Technology (NASDAQ:MRVL)




Source: Capital IQ, a division of Standard & Poor's; Yahoo! Finance; and CAPS. P/E = price-to-earnings ratio.

Wall Street analysts aren't known for being supernatural in their forecasting skills, so not all of these estimates may pan out. However, this list may be a good place to dig in for further research -- in fact, I'll even get you started with some thoughts on Joy Global.

Feeding the growth
Clean or not, coal is still the dominant source of electricity in the U.S. and around the world, and that promises to keep coal miners like Peabody Energy (NYSE:BTU) and Arch Coal (NYSE:ACI) with plenty to do. Of course, it would be tough for Peabody or Arch to do too much of anything without the machinery made by Joy Global's subsidiaries -- Joy Mining Machinery and P&H Mining Equipment.

Joy and P&H are, respectively, world leaders in the production of underground and surface mining equipment. To put it simply, as the world's population grows and emerging-market economies continue to develop, more electricity will be needed, which means more coal will be needed, which means miners will continue to punch in orders for Joy Global equipment.

A U.S. home base is perfect for a coal mining machinery company, as the U.S. is often referred to as the Saudi Arabia of coal. True to its name, though, Joy Global is taking advantage of opportunities around the world.

The company has a significant foothold in China and Australia -- the world's Nos. 3 and 5 in terms of coal reserves -- and it also has a presence in Russia and India, which have the second- and fourth-most coal reserves. In the company's most recent quarter, slightly more than half of total sales came from outside of the U.S.

Calling all bulls
For Joy Global investors looking for some, um, joy, the March-ended quarter provided a nice dollop of good news. Joy's sales crept up 9.5%, but the bottom line jumped 67%, and earnings per share significantly topped analyst estimates. Maybe even better was the fact that management said that while it expects revenue for 2009 to be in the lower half of its guidance range, it sees cost efficiencies helping to boost net income into the upper half of its projected range.

It'd be tough for CAPS members to be much more positive on Joy Global. With 1,392 outperform ratings against just 26 underperform ratings, the stock is a solid five-star pick. One of the many CAPS All-Stars who have given Joy a thumbs-up is bradford86, who recently pitched:

[T]he company has shown strength even in a very tough economy, a relatively small amount of long-term debt, and eventually commodity prices will begin to rebound, which should be a great boon for miners like Joy. They are doing the right things to make it through this rough patch ... Joy Global is still an appealing long term value.

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? Head over to CAPS and let the community know what you think of Joy Global or any of the other stocks listed above. It's totally free.

Further CAPS Foolishness:

Google is a Motley Fool Rule Breakers recommendation. American Oriental Bioengineering is a Motley Fool Hidden Gems choice (along with Nuance Communications), as well as a Motley Fool Global Gains selection. The Fool owns shares of American Oriental Bioengineering. 

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.