Companies that consistently increase their sales, margins, or returns on capital are usually rewarded with the best returns, and those that can do all three for years on end are almost always the legendary stocks that return 100 times your money.
Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. Keeping that in mind, here are three market-beating stocks with room for further growth.
KLA Corporation (KLAC)
Five-Year Return: +761%
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why Should You Buy KLAC?
- Annual revenue growth of 15.2% over the last five years was superb and indicates its market share increased during this cycle
- Healthy operating margin of 40% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last five years
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
KLA Corporation’s stock price of $268.43 implies a valuation ratio of 63.4x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Dycom (DY)
Five-Year Return: +542%
Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE: DY) builds and maintains telecommunications infrastructure.
Why Is DY a Top Pick?
- Annual revenue growth of 21% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 31.5% outpaced its revenue gains
- Free cash flow margin expanded by 5.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $476.74 per share, Dycom trades at 29.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Blue Bird (BLBD)
Five-Year Return: +237%
With around a century of experience, Blue Bird (NASDAQ: BLBD) is a manufacturer of school buses and complementary parts.
Why Will BLBD Beat the Market?
- Annual revenue growth of 14.3% over the last five years was superb and indicates its market share increased during this cycle
- Free cash flow margin increased by 21 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Returns on capital are climbing as management makes more lucrative bets
Blue Bird is trading at $77.91 per share, or 15.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
