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.
Long story short, there is a near-perfect correlation between consistent earnings growth and huge winners. Taking that into account, here are three market-beating stocks that deserve a spot on your list.
Vertiv (VRT)
Five-Year Return: +1,040%
Formerly part of Emerson Electric, Vertiv (NYSE: VRT) manufactures and services infrastructure technology products for data centers and communication networks.
Why Are We Backing VRT?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 21.9% over the past two years
- Free cash flow margin increased by 16 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Rising returns on capital show management is finding more attractive investment opportunities
Vertiv’s stock price of $243.25 implies a valuation ratio of 39.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Mueller Water Products (MWA)
Five-Year Return: +128%
As one of the oldest companies in the water infrastructure industry, Mueller (NYSE: MWA) is a provider of water infrastructure products and flow control systems for various sectors.
Why Will MWA Outperform?
- Operating margin improvement of 7.1 percentage points over the last five years demonstrates its ability to scale efficiently
- Additional sales over the last two years increased its profitability as the 45.2% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 4.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Mueller Water Products is trading at $29.78 per share, or 20.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
HCI Group (HCI)
Five-Year Return: +164%
Starting as a Florida "take-out" insurer that assumed policies from the state-backed Citizens Property Insurance Corporation, HCI Group (NYSE: HCI) provides property and casualty insurance, primarily homeowners coverage, while leveraging proprietary technology to improve underwriting and claims processing.
Why Do We Love HCI?
- Net premiums earned expanded by 28% annually over the last two years, demonstrating exceptional market penetration this cycle
- Impressive 65.1% annual book value per share growth over the last two years indicates it’s building equity value this cycle
- Book value per share outlook for the upcoming 12 months is outstanding and shows it’s on track to build significant equity value
At $157.77 per share, HCI Group trades at 2.1x forward P/B. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 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.
