Stocks that outperform the market usually share key traits such as rising sales, expanding margins, and increasing returns on capital. The select few that can do all three for many years are often the ones that make you life-changing money.
The bottom line is that over the long term, earnings growth goes hand in hand with the biggest winners. Keeping that in mind, here are three market-beating stocks with room for further growth.
KLA Corporation (KLAC)
Five-Year Return: +375%
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 Will KLAC Outperform?
- Annual revenue growth of 15.6% over the past five years was outstanding, reflecting market share gains this cycle
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 35.9%, and its rise over the last five years was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
KLA Corporation is trading at $857 per share, or 27.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
KBR (KBR)
Five-Year Return: +117%
Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.
Why Are We Fans of KBR?
- Annual revenue growth of 10.3% over the last two years beat the sector average and underscores the unique value of its offerings
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share buybacks catapulted its annual earnings per share growth to 15.8%, which outperformed its revenue gains over the last five years
KBR’s stock price of $52.79 implies a valuation ratio of 13.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
HCA Healthcare (HCA)
Five-Year Return: +265%
With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE: HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.
Why Are We Bullish on HCA?
- Dominant market position is represented by its $71.59 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- 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
- Industry-leading 28.2% return on capital demonstrates management’s skill in finding high-return investments
At $369.34 per share, HCA Healthcare trades at 14.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
