Companies that consistently increase their sales, margins, or returns on capital are usually rewarded with the best returns, and those that can do all three for years on end are almost always the legendary stocks that return 100 times your money.
The bottom line is that over the long term, earnings growth goes hand in hand with the biggest winners. Keeping that in mind, here are three market-beating stocks with room for further growth.
Woodward (WWD)
Five-Year Return: +220%
Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ:WWD) designs, services, and manufactures energy control products and optimization solutions.
Why Should You Buy WWD?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 11.4% over the past two years
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings per share have massively outperformed its peers over the last two years, increasing by 29.4% annually
At $372.95 per share, Woodward trades at 41.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Vertex Pharmaceuticals (VRTX)
Five-Year Return: +119%
Founded in 1989 with a mission to create medicines that treat the underlying causes of disease rather than just symptoms, Vertex Pharmaceuticals (NASDAQ:VRTX) develops and markets transformative medicines for serious diseases, with a focus on cystic fibrosis, sickle cell disease, and pain management.
Why Do We Like VRTX?
- Solid 14.4% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Robust free cash flow margin of 25.4% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute
- ROIC punches in at 43%, illustrating management’s expertise in identifying profitable investments
Vertex Pharmaceuticals’s stock price of $470.68 implies a valuation ratio of 23.3x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Arthur J. Gallagher (AJG)
Five-Year Return: +111%
Founded in 1927 and operating in approximately 130 countries through direct operations and correspondent networks, Arthur J. Gallagher (NYSE:AJG) provides insurance brokerage, reinsurance, consulting, and third-party claims settlement services to businesses and individuals worldwide.
Why Is AJG a Top Pick?
- Annual revenue growth of 17.9% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 17.7% annually over the last five years and trumped its peers
- AJG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Arthur J. Gallagher is trading at $250.00 per share, or 18.7x forward P/E. Is now a good 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 5 Strong Momentum Stocks for this week. 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.