Popular stocks tend to get overvalued quickly.

This can be a double-edged sword. Buying a stock on an upward trend creates a big chance for profit. Yet, there’s no telling when that trend will last, so you risk buying at the top. Many investors sidestep this issue by buying under-the-radar stocks. These companies aren’t too popular yet. But their financials are rock-solid, and their metrics are in line.

To get my list, I screened the market using the criteria below.

• At least 10% full-year revenue growth based on the latest annual report
• Positive full-year earnings growth based on the latest annual report
• A minimum of eight analysts covering the stock
• A strong buy, buy or perform rating
• Year-to-date (YTD) performance between 5% and 30%

The following is listed in highest to lowest YTD performance to prioritize the top performers. Let’s examine the three under-the-radar stocks with the strongest potential.

Dutch Bros (BROS)

One of the rising stars in the coffee business, Dutch Bros (NYSE:BROS) has slowly gained traction in the market. The company is known for its commitment to using only the highest-quality coffee beans in its hand-crafted beverages. 

While it’s too early to say that it will threaten coffee giants like Starbucks, it is growing at a pace that shouldn’t be underestimated. Recently, the company partnered with Olo to help enhance ordering experience and boost growth through a mobile app ordering system. 

Notably, Dutch Bros had a great 2023, opening 159 shops across 13 U.S. states. It contributed to revenue growth of 30.7% year-over-year (YOY), reaching $965.8 million. Also, adjusted EBITDA increased by 75.5%, and EPS reached 3 cents against the previous year’s 9-cent loss. 

A quick look at the Q1 of 24 report shows that Dutch Bros is doing extremely well. Guidance for fiscal year 2024 revenue was increased from $1.205 billion to $1.215 billion on the high end. Chief Executive Officer (CEO) Christine Barone says its success is due to effective strategic initiatives, new product launches and increased engagement through Dutch Rewards. 

Wall Street rates it as a strong buy based on 12 analyst scores. BROS stock is now up 29.04% YTD, so consider adding this to your portfolio of under-the-radar stocks. 

BWX Technologies (BWXT)

Known from its original name, Babcock & Wilcox Nuclear Energy, BWX Technologies (NYSE:BWXT) is a nuclear power specialist. It offers systems used in carrier fleets for submarines and planes, supplies for various nuclear sites, nuclear medicine and components used in clean energy production. 

The company has been awarded several contracts, helping boost its stock’s marketability. These include the second contract phase with the Wyoming Energy Authority and the Pantex plant contract.

BWX reported a 12% YOY increase in revenue for FY 2023, driven by government and commercial operations growth. GAAP EPS, meanwhile, grew by 3%. 

“We had a strong finish to 2023,” said President and CEO Rex D. Geveden, “with double-digit revenue and adjusted EBITDA growth and robust free cash flow in the fourth quarter, as expected.” 

This performance led to BWXT stock being up 27.39% YTD. Also, eight analysts rate it a strong buy. Therefore, investors looking for under-the-radar stocks should keep an eye on BWXT. 

Public Service Enterprise Group (PEG)

Public Service Enterprise Group (NYSE:PEG) is an energy company that operates in the Mid-Atlantic and Northeastern parts of the U.S. through two key subsidiaries.

PSEG Power LLC functions as the major electricity supplier in the Mid-Atlantic and Northeastern regions. And, Public Service Electric and Gas Company is a utility company using its natural gas and electricity distribution in New Jersey.

In addition, the company has been making significant strides in decarbonization. Its Clean Energy Future Energy Efficiency (CEF-EE) initiatives show positive results and are expected to reduce up to 1.6M metric tons of carbon emissions annually.

PEG’s FY 2023 operating revenues reached $11.24 billion against FY 2022’s $9.8 billion, a 15% growth rate. Also, it reported a significant increase in EPS, from $2.06 to $5.13. 

CEO, President and Chair Ralph LaRossa attributes the growth to the company’s focus on “meeting our customers’ needs by modernizing our system infrastructure, maintaining our best in the state reliability and resiliency, and expanding our energy efficiency offerings to customers at every income level to help them reduce their energy usage and bills.” 

PEG stock is up 24.36% YTD and has a buy rating from 18 analysts, making it one of the more likely under-the-radar stocks to see excellent returns in 2024. 

On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.