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. Keeping that in mind, here are three market-beating stocks that deserve a spot on your list.
Fastenal (FAST)
Five-Year Return: +75.5%
Founded in 1967, Fastenal (NASDAQ: FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.
Why Is FAST on Our Radar?
- Products are seeing elevated demand as its unit sales averaged 9.1% growth over the past two years
- Offerings are difficult to replicate at scale and result in a best-in-class gross margin of 45.5%
- Healthy operating margin of 20.4% shows it’s a well-run company with efficient processes
Fastenal’s stock price of $45.35 implies a valuation ratio of 35x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
ESCO (ESE)
Five-Year Return: +187%
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 Will ESE Outperform?
- Annual revenue growth of 11.5% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 36.3% over the last two years outstripped its revenue performance
- Free cash flow margin jumped by 10.9 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
ESCO is trading at $321.16 per share, or 38.4x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Ares (ARES)
Five-Year Return: +101%
With roots in the leveraged finance group of Apollo Management, Ares Management (NYSE: ARES) is an alternative investment firm that manages private equity, credit, real estate, and infrastructure assets for institutional and high-net-worth clients.
Why Are We Bullish on ARES?
- Impressive 21.4% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Earnings growth has comfortably beaten the peer group average over the last five years as its EPS has compounded at 20.7% annually
At $112.96 per share, Ares trades at 18.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
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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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
