The best-performing stocks typically have robust sales growth, increasing margins, and rising returns on capital, and those that can maintain this trifecta year in and year out often become the legends of the investing world.
It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. Taking that into account, here are three market-beating stocks with room for further growth.
Watts Water Technologies (WTS)
Five-Year Return: +150%
Founded in 1874, Watts Water (NYSE: WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Why Are We Fans of WTS?
- Offerings are difficult to replicate at scale and result in a best-in-class gross margin of 45.5%
- Operating margin expanded by 4.9 percentage points over the last five years as it scaled and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 20.7% exceeded its revenue gains over the last five years
At $275.48 per share, Watts Water Technologies trades at 27.1x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
SoundHound AI (SOUN)
Return Since IPO: +139%
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
Why Should SOUN Be on Your Watchlist?
- Average billings growth of 202% over the last year enhances its liquidity and shows there is steady demand for its products
- Market share will likely rise over the next 12 months as its expected revenue growth of 42.4% is robust
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
SoundHound AI’s stock price of $17.95 implies a valuation ratio of 38.1x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
The Ensign Group (ENSG)
Five-Year Return: +212%
Founded in 1999 and named after a naval term for a flag-bearing ship, The Ensign Group (NASDAQ: ENSG) operates skilled nursing facilities, senior living communities, and rehabilitation services across 15 states, primarily serving high-acuity patients recovering from various medical conditions.
Why Could ENSG Be a Winner?
- Products are reaching more customers as its unit sales averaged 12.2% growth over the past two years
- Projected revenue growth of 15% for the next 12 months suggests its momentum from the last two years will persist
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 17.3% annually
The Ensign Group is trading at $186.28 per share, or 27.5x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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