Business services providers play a critical role for enterprises, assisting them with everything from new hardware integrations to consulting and marketing. Furthermore, the demand for their offerings is rising as more clients outsource non-core functions, a trend that has enabled the industry to return 9.1% over the past six months, almost identical to the S&P 500.

Although these companies have produced results, only a handful will thrive over the long term as AI-driven upstarts are rapidly taking share from the incumbents. On that note, here are three services stocks boasting durable advantages.

Coherent (COHR)

Market Cap: $42.82 billion

Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE: COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing.

Why Is COHR Interesting?

1. Impressive 16.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Market share is on track to rise over the next 12 months as its 23.4% projected revenue growth implies demand will accelerate from its two-year trend
3. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 69.9% annually

Coherent’s stock price of $230.27 implies a valuation ratio of 38.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Booz Allen Hamilton (BAH)

Market Cap: $10.85 billion

With roots dating back to 1914 and deep ties to nearly all U.S. cabinet-level departments, Booz Allen Hamilton (NYSE: BAH) provides management consulting, technology services, and cybersecurity solutions primarily to U.S. government agencies and military branches.

Why Are We Positive On BAH?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 7.8% annual sales growth over the last five years
2. Economies of scale give it distribution advantages and fixed cost leverage when sales grow
3. Returns on capital are growing as management capitalizes on its market opportunities

At $89.83 per share, Booz Allen Hamilton trades at 15.1x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Brown & Brown (BRO)

Market Cap: $22.72 billion

With roots dating back to 1939 and operations spanning 44 U.S. states and 14 countries, Brown & Brown (NYSE: BRO) is an insurance brokerage and risk management firm that markets and sells insurance products across property, casualty, and employee benefits sectors.

Why Is BRO a Good Business?

1. Projected revenue growth of 21.7% for the next 12 months is above its two-year trend, pointing to accelerating demand
2. Earnings per share grew by 23.7% annually over the last two years, massively outpacing its peers
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

Brown & Brown is trading at $68 per share, or 15.2x 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

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.