7 Stocks With a Bright Future

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 have produced 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 140,000-member Motley Fool's CAPS community thinks of the companies' prospects.

Source: 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 a couple of these stocks.

Cool to the touch?
It's pretty obvious that the CAPS community thinks we should skip over both Abercrombie and Home Depot. The reason is simple: They think the U.S. consumer is more cooked than the turkey I deep-fried last Thanksgiving.

Now, while my turkey was delicious, a deep-fried consumer is far less appetizing because it means less discretionary spending on things like clothing and home improvements. CAPS member shreebs recently weighed in on Abercrombie with a thumbs-down, citing concerns over how much the stock has rebounded considering the position of U.S. consumers:

Has run up way too much with many of the retails. ... [S]igns the US consumer wasn't buying with lower consumer conf then expected and lower July retail purchases. They beat analysts expectations ... but they sell high priced clothing and apparal and in this environment with the consumer finally cutting back big time they can't keep up. Either sales or margins will drop form here out and either way earnings won't meet their expectations.

Bringing the heat
But what about high growth and a high rating from the CAPS community? For that, we can turn to ENSCO International. ENSCO's stock has received 981 outperform ratings on CAPS, against a paltry 17 underperform ratings.

So what makes this company so attractive? JakilaTheHun, who is ranked in the top 0.1% of all CAPS members, recently logged this bullish take on ENSCO:

This is my No. 1 stock pick for August '09. ... [T]his still looks like an incredible bargain to me. What makes [ENSCO] look particularly enticing is their low debt, great history of profitability, and position in an industry with strong growth potential. You'd think with that profile, the stock would be selling at a sizable premium, but that's simply not the case. ...

Maybe the market is still somewhat sour on oil, but given the high dependence on oil in the US, and increasing dependence in China and India, I still believe offshore oil related services are a winner in the long-term. [ENSCO] looks like a real bargain at these prices.

That's just an excerpt, so go ahead and take a look at this member's full-length pitch on why ENSCO "looks like a real bargain."

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? More than 140,000 members of the free CAPS community are debating issues just like this on thousands of stocks. Head over to CAPS and let the community know what you think of any of the stocks listed above.