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 that deserve a spot on your list.
Blue Bird (BLBD)
Five-Year Return: +207%
With around a century of experience, Blue Bird (NASDAQ: BLBD) is a manufacturer of school buses and complementary parts.
Why Is BLBD a Top Pick?
- Unit sales averaged 9.2% growth over the past two years and imply healthy demand for its products
- Free cash flow margin jumped by 23.3 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Returns on capital are growing as management capitalizes on its market opportunities
Blue Bird’s stock price of $61.82 implies a valuation ratio of 13x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Raymond James (RJF)
Five-Year Return: +88.2%
Founded in 1962 and headquartered in St. Petersburg, Florida, Raymond James Financial (NYSE: RJF) is a diversified financial services company that provides wealth management, investment banking, asset management, and banking services to individuals and institutions.
Why Are We Fans of RJF?
- Products and services resonate with customers, evidenced by its respectable 10.8% annualized sales growth over the last two years
- Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Raymond James is trading at $168.73 per share, or 12.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
SM Energy (SM)
Five-Year Return: +83.7%
Operating across three key regions with over 328,000 net acres under its control, SM Energy (NYSE: SM) explores for, develops, and produces oil, natural gas, and natural gas liquids primarily from shale formations in Texas and Utah.
Why Are We Bullish on SM?
- Annual revenue growth of 16.7% over the past ten years was outstanding, reflecting market share gains this cycle
- Highly-profitable operating model results in strong unit economics and a best-in-class gross margin of 86.8%
- EBITDA profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
At $41.54 per share, SM Energy trades at 5.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
