Applied Materials, Progressive, and PulteGroup are highlighted as defensible growth-at-a-reasonable-price stocks for the second half of 2026.
Applied Materials posted 25% revenue growth and raised guidance, though its valuation of more than 41 times earnings is not considered cheap.
Progressive surpassed 40 million policies in force and is improving capital flexibility, while PulteGroup offers stronger value but faces housing market risks.
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Growth at a reasonable price (GARP) may be an overlooked multi-factor investment strategy, but this combination of growth and value factors is nonetheless compelling. GARP stocks can be at a disadvantage during periods when a strong bull run rewards the most growth-oriented stocks, regardless of their valuations. However, during economic transition periods when high-growth names lose momentum, GARP names can offer a healthy balance of return potential and value.
Applied Materials Inc. NASDAQ: AMAT, Progressive Corp. NYSE: PGR, and PulteGroup, Inc. NYSE: PHM are all defensible GARP stocks for the second half of 2026, but for a variety of different reasons. As such, they may each appeal to investors seeking a different balance of value and growth characteristics—or an investment in all three could provide diversification across not only industries and sectors, but also fundamental strengths.
Applied Materials' Massive Growth Prospects May Outweigh Its Not-So-Cheap Valuation
The company's latest quarter brought record performance across multiple metrics: revenue climbed by 25% year over year (YOY), non-GAAP earnings per share (EPS) reached $3.50, ahead of estimates, and management raised guidance. Analysts see 43% in earnings growth for Applied Materials in the coming year, as the stock enjoys strong bullish support across Wall Street.
With EPS growth well above the market average, compelling free cash flow as part of a strengthening balance sheet, and a solid recent history of share repurchases, Applied Materials checks many boxes for GARP investors, although its valuation is not as competitive as that of some other companies investors might consider. Trading at more than 41x earnings, Applied Materials is not "cheap," but it is arguably reasonably priced given its massive growth expectation. Of course, investors making a bet on AMAT are also wagering that AI hardware demand will stay strong in the coming quarters—or that the company's pick-and-shovel status will insulate it from some turbulence as it comes.
Major growth in the company's policies in force has led Progressive to top 40 million for the first time in the latest quarter, despite increased competition and elevated shopping activity. At the same time, as the company moves most of its eligible insurance entities to a 3.5x premium-to-surplus ratio by the end of this year, it should have greater capital flexibility, which it can then use to fund more underwriting growth and, potentially, dividends or share buybacks.
While Progressive's valuation is unlikely to be considered "cheap," its sustainable, compounding growth makes it a compelling option. Nonetheless, investors might want to watch for a potential slowdown in pricing or investment income, or changes in catastrophe losses—all of which could impact the company's competitiveness.
A Different Value/Growth Trade-Off, But in a Turbulent Industry
This company's valuation is likely more competitive than the two firms above, but it may sacrifice some of its growth potential as a trade-off. At the same time, an investment in a homebuilder is a contrarian move for many at this stage—but Wall Street is generally very optimistic about PHM shares, based on 13 Buy ratings compared to only five Holds and a recent spate of upgradings and bullish reiterations.
Pulte's significant reliance on the macro housing market may make it an attractive choice only for investors expecting that this market will either remain static or potentially improve, which may be a tall order. As a value-with-some-growth potential option, though, and in the right housing scenario, Pulte could outperform expectations.
Should You Invest $1,000 in Applied Materials Right Now?
Before you consider Applied Materials, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Applied Materials wasn't on the list.
While Applied Materials currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
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