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.

It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. Keeping that in mind, here are three market-beating stocks with room for further growth.

Cadence (CDNS)

5-Year Return: +281%

With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ: CDNS) offers a software-as-a-service platform for semiconductor engineering and design.

Why Is CDNS a Good Business?

1. Billings growth has averaged 16.2% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
2. Superior software functionality and low servicing costs result in a best-in-class gross margin of 86%
3. Software platform has product-market fit given the rapid recovery of its customer acquisition costs

Cadence is trading at $252.30 per share, or 13.2x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.

Powell (POWL)

5-Year Return: +440%

Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE: POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.

Why Will POWL Outperform?

1. Market share has increased this cycle as its 38.5% annual revenue growth over the last two years was exceptional
2. Earnings per share grew by 337% annually over the last two years and trumped its peers
3. Rising returns on capital show management is finding more attractive investment opportunities

Powell’s stock price of $173.20 implies a valuation ratio of 11.8x forward price-to-earnings. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

HCA Healthcare (HCA)

5-Year Return: +138%

Founded in 1968 as a single hospital, HCA Healthcare (NYSE: HCA) is one of the largest hospital operators in the US today, running hospitals, urgent care centers, surgery centers, and emergency rooms.

Why Is HCA a Top Pick?

1. Massive revenue base of $70.6 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
2. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. Industry-leading 29.3% return on capital demonstrates management’s skill in finding high-return investments

At $306.05 per share, HCA Healthcare trades at 12.5x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.

Get started by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.