Sometimes, you get what you pay for.
Indeed, this phrase can be applied to investing quite easily, with companies that have strong growth prospects often trading at extremely rich valuations.
However, with investor confidence being in limited supply at the moment, there are a number of stocks that offer excellent growth prospects, but which trade at very attractive valuations, too.
With that in mind, here are three high quality stocks that could help you to grow your way to riches.
Oil Search
As its name suggests, Oil Search Limited (ASX: OSH) is heavily involved in the oil sector and with crude prices falling by up to 25% during the course of 2014, it hasn't been a great year for investors in the stock, with it delivering flat performance year-to-date.
Despite this, the company's 29% stake in the PNG LNG project could be the answer to its oil problem. That's because contracts are in place with customers in Asia that provide the company with a relatively stable and consistent revenue stream. And, with production set to ramp up over the next few years, shares in Oil Search could be at the start of a highly lucrative period.
With earnings set to grow at an annualised rate of 85.8% over the next two years, and its shares trading on a P/E ratio of 22.4, Oil Search's PEG ratio of 0.26 screams 'growth at a reasonable price'. As such, it could be due a strong rise over the medium term.
Woodside Petroleum
Also suffering from a lower oil price this year is Woodside Petroleum Limited (ASX: WPL), with its share price falling by 6% in the last three months alone. As with Oil Search, though, Woodside's LNG projects continue to perform well and, as such, the company is expected to report earnings growth of 15.4% per annum over the next two years.
This is clearly an impressive rate, but total returns over the period should also be aided by a fat, fully franked yield of 5.9%.
Furthermore, with shares in Woodside trading on a P/E ratio of just 12.2, it's difficult to justify such a low valuation when the company has such strong growth prospects ahead of it. Certainly a low oil price will squeeze margins but, with a PEG ratio of 0.8, there seems to be a very generous margin of safety already built into Woodside's current share price.
QBE Insurance Group
Of course, it's not only oil stocks that have endured a tough recent past. Insurance major QBE Insurance Group Ltd (ASX: QBE) has struggled for many years to deliver impressive results but, with a new strategy, it seems to be on the right path.
Indeed, a key part of the company's new focus is on divesting assets. For example, it plans to spin-off its lenders mortgage insurance business in Australia, which could unlock shareholder value over the next couple of years. In addition, QBE is exiting non-core business lines in an attempt to make the business simpler, more efficient and more profitable.
With its bottom line due to return to profitability in the current year, and growth of 30% forecast for next year, QBE's P/E ratio of 16.8 appears to represent excellent value for money. As such, 2015 could see QBE post strong gains, which would clearly be a welcome change for investors after its turbulent performance in recent years.
