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 such as these set the gold standard in public market investing. That said, here are three quality compounders that could amplify your portfolio’s returns.
DoorDash (DASH)
Market Cap: $75.34 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 Is DASH a Top Pick?
- Orders have grown by 22.9% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Expected revenue growth of 25.5% for the next year suggests its market share will rise
- Additional sales over the last three years increased its profitability as the 180% annual growth in its earnings per share outpaced its revenue
DoorDash’s stock price of $172.91 implies a valuation ratio of 19.2x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Comfort Systems (FIX)
Market Cap: $60.91 billion
Formed through the merger of 12 companies, Comfort Systems (NYSE: FIX) provides mechanical and electrical contracting services.
Why Do We Love FIX?
- Demand is greater than supply as the company’s 56% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
- Free cash flow margin grew by 15.1 percentage points over the last five years, giving the company more chips to play with
- Improving returns on capital reflect management’s ability to monetize investments
Comfort Systems is trading at $1,729 per share, or 33.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Eli Lilly (LLY)
Market Cap: $1.07 trillion
Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE: LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.
What Makes LLY Stand Out?
- Annual revenue growth of 41.8% over the past two years was outstanding, reflecting market share gains this cycle
- Adjusted operating profits increased over the last two years as the company gained some leverage on its fixed costs and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 29.6% exceeded its revenue gains over the last five years
At $1,197 per share, Eli Lilly trades at 33.5x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
