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.

The bottom line is that over the long term, earnings growth goes hand in hand with the biggest winners. Taking that into account, here are three market-beating stocks that deserve a spot on your list.

PACCAR (PCAR)

Five-Year Return: +107%

Founded more than a century ago, PACCAR (NASDAQ: PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.

Why Are We Fans of PCAR?

1. Operating margin improvement of 6.3 percentage points over the last five years demonstrates its ability to scale efficiently
2. Industry-leading 30.7% return on capital demonstrates management’s skill in finding high-return investments, and its rising returns show it’s making even more lucrative bets
3. Rising returns on capital show management is finding more attractive investment opportunities

PACCAR is trading at $89.75 per share, or 11.9x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Nextracker (NXT)

Return Since IPO: +27.4%

With its technology playing a key role in the massive 1.2 gigawatt Noor Abu Dabhi solar farm project, Nextracker (NASDAQ: NXT) is a provider of solar tracker systems that help solar panels follow the sun.

Why Do We Love NXT?

1. Backlog has averaged 56.1% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 131% outpaced its revenue gains
3. Free cash flow margin grew by 13.1 percentage points over the last five years, giving the company more chips to play with

At $38.80 per share, Nextracker trades at 12x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.

KBR (KBR)

Five-Year Return: +125%

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 Positive On KBR?

1. Projected revenue growth of 14% for the next 12 months is above its two-year trend, pointing to accelerating demand
2. Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
3. Improving returns on capital suggest its past investments are beginning to deliver value

KBR’s stock price of $47 implies a valuation ratio of 12.5x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 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 United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.