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Johnson Matthey plc isn’t the only Footsie growth stock that could make you a millionaire

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Even though the FTSE 100 has fallen in recent weeks, it’s still trading within 7% of its all-time high. As such, investors may be finding it hard to unearth growth stocks that are on offer at a reasonable price.

However, the outlook for sustainable technologies specialist Johnson Matthey (LSE: JMAT) appears to be bright. And it seems to trade at a fair valuation given the positive update released on Wednesday. But it’s not the only large-cap that could be worth buying today.

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Surprising outlook

One company which could also offer growth at a reasonable price is J Sainsbury (LSE: SBRY). This may take some investors by surprise, since the retail giant has experienced a challenging period. Consumer confidence is relatively low and competition in the supermarket sector has intensified with the growth of Aldi and Lidl. These factors are expected to remain in play over the next few years, which means the company may experience challenging trading conditions.

However, Sainsbury’s seems to have made a shrewd move with the acquisition of Argos. There appear to be significant synergies that can be delivered, while the two companies seem to be a good fit in terms of their customer demographics and price points. As such, the stock is forecast to post a rise in its bottom line of 10% in the next financial year. This puts it on a price-to-earnings growth (PEG) ratio of only 1.2, which indicates that it may offer upside potential.

Certainly, the company’s stock price could be volatile in the coming years. But its wide margin of safety and the potential for improving financial performance could push its valuation higher.

Strong performance

Of course, Johnson Matthey also appears to offer a bright future. The company’s business update released on Wednesday showed that it continues to perform in line with expectations. Furthermore, it has announced that the lawsuit it faced — regarding a component which it supplied — has been settled on mutually acceptable terms with no admission of fault. The company will recognise a charge of £50m in connection with the resolution of the lawsuit.

Additionally, the US Tax Cuts and Jobs Act is expected to lead to a revaluation of its deferred tax liabilities. This is estimated to result in a £30m one-off non-cash benefit. The Act is also expected to reduce Johnson Matthey’s annual tax rate on underlying profit by two percentage points from 2019 onwards.

With the stock expected to report a rise in its bottom line of 9% in each of the next two financial years, it appears to have a bright future. With a PEG ratio of 1.5, it seems to offer good value for money. And with a potential tailwind over the coming years in the sustainable products segment, it could prove to be a strong performer in the long run.

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Peter Stephens owns shares in Sainsbury's and Johnson Matthey. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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