If I asked you to describe the ideal company, what would you say? No, no, I'm not asking you to tick off your favorite members of the Fortune 500 or some up-and-comer small cap that you've just found. I want you to think about the characteristics you'd give a company if you could dream it right into existence.

Would it be in a particular industry? Would it be services- or product-based? Would it have fat profit margins or would it make its money by doing a huge volume?

We could spend all day going over the details of this Galatea of the business world, but I would guess that there is at least one aspect that we'd all include in our creation -- growth. All those other details are great, but how interesting can a business be if it's stagnating and lacks avenues for expansion?

Turning back to reality, I have dug up a handful of companies that actually exist and are expected to post significant growth in the years to come. These companies may not all be the picture of perfection, but I've also consulted the 135,000 members of the Motley Fool's CAPS community to get an idea of which are our best bets in the group.


Expected Long-Term Growth

TTM Price-to-Earnings Ratio

CAPS Rating
(out of 5)

Baidu.com (NASDAQ:BIDU)




Corning (NYSE:GLW)




Automatic Data Processing (NYSE:ADP)




Lowe's Companies (NYSE:LOW)




Northrop Grumman (NYSE:NOC)




Sources: Capital IQ, a division of Standard & Poor's; Yahoo! Finance; and CAPS. TTM = trailing 12 months.

While these aren't meant to be formal recommendations, they could be a great place to kick off further research. In fact, let's dig in a bit further on a favorite of the CAPS community, Automatic Data Processing.

Fueling the growth
It must feel good to be ADP. The company is one of the largest providers of business outsourcing services in the world, reaps a recurring revenue stream year in and year out, and has an average client retention rate of a decade in some of its businesses.

And although the company claims to already have something like 560,000 businesses using its services, it's shown the ability to tap its global footprint to sign up new clients and grow its revenue base.

But ADP isn't without its risks. We could say that the company is recession-resistant, but it would be a mistake to think that it's immune. Many of ADP's services are billed based on the number of employees served, and with companies such as Continental and Harley-Davidson (NYSE:HOG) still announcing significant layoffs, we can safely say that ADP is likely seeing some shrinkage in the number of employees it services for existing clients. ADP also collects interest on funds that it holds for its clients, and interest rates at rock-bottom levels don't help that part of the business one bit.

At the same time, there are smaller companies, like Paychex (NASDAQ:PAYX), competing hard for the same customers that ADP would like to sign up.

Perfection or poser?
Although ADP falls short of a perfect five-star CAPS rating, its four stars make it a stock well worth serious consideration.

Just more than 600 CAPS members have given ADP an outperform rating, and that group includes CAPS All-Star kevday, who weighed in back in June with this pitch:

Virtually no debt, nice fat dividend, reasonable payout, market leader. All it has to do is grow with the economy and keep paying dividends and you have very low risk stable 9% return (3.5% dividend, 5.5% earnings growth - avg long term historical market trend). Anything else is gravy....

I've already given ADP's stock a thumbs-up in my CAPS portfolio, so now I want to know what you think. Share your thoughts in the comments section below or, better still, head over to CAPS and share your opinion with the entire CAPS community.

Further Foolishness:

Baidu.com is a Motley Fool Rule Breakers pick. Lowe's Companies and Paychex are Motley Fool Inside Value recommendations. Automatic Data Processing, Paychex, and Petrobras are Motley Fool Income Investor selections. Try any of our Foolish newsletters today, free for 30 days

Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned in this article. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool. The Fool's disclosure policy thinks recurring revenue is almost as cool as recurring Seinfeld episodes ... almost.