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. Taking that into account, here are three market-beating stocks with room for further growth.
Applied Materials (AMAT)
Five-Year Return: +254%
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 Fans of AMAT?
- Highly efficient business model is illustrated by its impressive 28.7% operating margin
- Has the option to reinvest or return capital to investors as its 21.7% free cash flow margin is well above its peers
- ROIC punches in at 46.8%, illustrating management’s expertise in identifying profitable investments
Applied Materials is trading at $436.90 per share, or 33.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
TJX (TJX)
Five-Year Return: +113%
Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE: TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.
Why Should TJX Be on Your Watchlist?
- Comparable store sales rose by 3.9% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Dominant market position is represented by its $60.37 billion in revenue, which compensates for its subpar gross margin
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are climbing as it finds even more attractive growth opportunities
At $153.70 per share, TJX trades at 30.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
The Ensign Group (ENSG)
Five-Year Return: +104%
Founded in 1999 and named after a naval term for a flag-bearing ship, The Ensign Group (NASDAQ: ENSG) operates skilled nursing facilities, senior living communities, and rehabilitation services across 15 states, primarily serving high-acuity patients recovering from various medical conditions.
Why Do We Like ENSG?
- Impressive 19.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Forecasted revenue growth of 16.4% for the next 12 months indicates its momentum over the last two years is sustainable
- Earnings per share grew by 16.4% annually over the last five years, massively outpacing its peers
The Ensign Group’s stock price of $171.42 implies a valuation ratio of 22.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
