A quality compounder is a business that not only sports durable competitive advantages but also builds on its success by consistently reinvesting its profits at high returns.
Companies with these characteristics are our definition of a “blue-chip”. Keeping that in mind, here are three quality compounders that could amplify your portfolio’s returns.
Uber (UBER)
Market Cap: $139.9 billion
Notoriously funded with $7.7 billion from the Softbank Vision Fund, Uber (NYSE: UBER) operates a platform of on-demand services such as ride-hailing, food delivery, and freight.
Why Is UBER a Good Business?
- Monthly Active Platform Consumers have grown by 15.6% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Share repurchases over the last three years enabled its annual earnings per share growth of 41% to outpace its revenue gains
- Free cash flow margin expanded by 13.3 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
At $68.63 per share, Uber trades at 11.8x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
DoorDash (DASH)
Market Cap: $79.53 billion
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NASDAQ: DASH) operates an on-demand food delivery platform.
Why Should You Buy DASH?
- Has the opportunity to boost monetization through new features and premium offerings as its orders have grown by 23.5% annually over the last two years
- Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 20%, and it turbocharged its profits by achieving some fixed cost leverage
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 98.3% over the last three years outstripped its revenue performance
DoorDash’s stock price of $185.02 implies a valuation ratio of 18.7x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
EMCOR (EME)
Market Cap: $33.28 billion
Through its network of over 70 subsidiaries, EMCOR (NYSE: EME) provides electrical, mechanical, and building construction and services
Why Are We Bullish on EME?
- Annual revenue growth of 16.3% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Returns on capital are growing as management capitalizes on its market opportunities
EMCOR is trading at $758.00 per share, or 21.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
