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 could turbocharge your returns.
ESCO (ESE)
Five-Year Return: +254%
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
Why Is ESE a Top Pick?
- Market share has increased this cycle as its 12.3% annual revenue growth over the last two years was exceptional
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 38.4% outpaced its revenue gains
- Free cash flow margin increased by 10.9 percentage points over the last five years, giving the company more capital to invest or return to shareholders
ESCO is trading at $332.78 per share, or 39.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Johnson Controls (JCI)
Five-Year Return: +108%
Founded after patenting the electric room thermostat, Johnson Controls (NYSE: JCI) specializes in building products and technology solutions, including HVAC systems, fire and security systems, and energy storage.
Why Do We Like JCI?
- Adequate gross margin of 32.9% gives it sufficient room to spend on marketing and product development
- Share buybacks propelled its annual earnings per share growth to 14.1%, which outperformed its revenue gains over the last two years
- Free cash flow margin increased by 6.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $141.87 per share, Johnson Controls trades at 26.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Diamondback Energy (FANG)
Five-Year Return: +88.5%
Sporting one of Wall Street's most memorable ticker symbols, Diamondback Energy (NASDAQ: FANG) drills for and produces oil and natural gas from underground rock formations in the Permian Basin of West Texas and New Mexico.
Why Do We Love FANG?
- Market share has increased this cycle as its 42.8% annual revenue growth over the last ten years was exceptional
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 80.2%
- Robust free cash flow margin of 37.1% gives it many options for capital deployment
Diamondback Energy’s stock price of $171.83 implies a valuation ratio of 8.2x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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 (+1,326% 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.
