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.
It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. On that note, here are three market-beating stocks that deserve a spot on your list.
Applied Materials (AMAT)
Five-year return: +193%
Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ: AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Why Are We Positive on AMAT?
- Projected revenue growth of 45% for the next 12 months indicates demand will rise above its two-year trend
- Healthy operating margin of 29.9% shows it’s a well-run company with efficient processes
- Industry-leading 45.6% return on capital demonstrates management’s skill in finding high-return investments
Applied Materials is trading at $398.14 per share, or 22x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
TransDigm (TDG)
Five-year return: +80%
Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.
Why Do We Love TDG?
- Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 9.3% over the past two years
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
At $1,131 per share, TransDigm trades at 24.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
ANI Pharmaceuticals (ANIP)
Five-year return: +86.3%
With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ: ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.
Why Do We Like ANIP?
- Market share has increased this cycle as its 34.7% annual revenue growth over the last two years was exceptional
- Earnings per share grew by 19.9% annually over the last five years and trumped its peers
- Free cash flow margin increased by 38.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
ANI Pharmaceuticals’s stock price of $72.05 implies a valuation ratio of 7.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-quality stocks for all market conditions
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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
