With the economy in the U.S. poised to grow at a mediocre rate for the remainder of this year, investors should look for companies that have growth prospects despite this outlook. One such company is Blackbaud (BLKB - Get Report) , a South Carolina based provider of software to non-profits and foundations.

The company is emerging from a transitional year where it adopted several cloud based solutions for clients that is helping drive sales. Blackbaud also acquired Tuition Smart, which has opened the door to growth of software sales to schools, a whole new area of business for the firm.

While other software providers are dependent on a strong economy to drive growth, Blackbaud's subscription-based software has recurring revenue from non-profits that are not as beholden to the broader economy. In addition, the company provides software that allows charitable giving to take place online, and this is an area that is still in its early stages of growth. According to Charity Navigator, online giving comprises less than 10% of total giving but outpaces the growth of giving overall.

Last month, the company reported strong earnings and sales for the fourth quarter of 2015, but the real story was management's outlook for this year, sales are expected to accelerate. Blackbaud's move into cloud-based products has been well-received by charitable organizations, and growth in the educational space is expected to add an additional revenue stream. Wall Street analysts seem to agree, as recent estimates are calling for a 30% increase in earnings for this year.

The stock is not for everyone, however, as the company has always traded at a high multiple and its current price-to-earnings ratio is no exception. It is now at 42-times current earnings and 32-times expected earnings. Most growth stocks command a high multiple, however, and if management is able to deliver on its outlook, this stock should continue to go higher.



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This article is commentary by an independent contributor. At the time of publication, the author holds a position in the stock mentioned.