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. On that note, here are three market-beating stocks that deserve a spot on your list.
Powell (POWL)
Five-Year Return: +2,063%
Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE: POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.
Why Will POWL Outperform?
- Annual revenue growth of 20.5% over the past five years was outstanding, reflecting market share gains this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 22.2% over the last two years outstripped its revenue performance
- Free cash flow margin increased by 25.2 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Powell is trading at $187.75 per share, or 29.7x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Allison Transmission (ALSN)
Five-Year Return: +223%
Helping build race cars at one point, Allison Transmission (NYSE: ALSN) offers transmissions to original equipment manufacturers and fleet operators.
Why Are We Bullish on ALSN?
- Annual revenue growth of 18.9% over the past two years was outstanding, reflecting market share gains this cycle
- Share buybacks catapulted its annual earnings per share growth to 17.7%, which outperformed its revenue gains over the last five years
- ALSN is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $111.35 per share, Allison Transmission trades at 10.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Bloom Energy (BE)
Five-Year Return: +1,074%
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Should You Buy BE?
- Impressive 53.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Free cash flow turned positive over the last five years, indicating the company has passed a significant test
- Historical investments are beginning to pay off as its returns on capital are growing
Bloom Energy’s stock price of $259.25 implies a valuation ratio of 79.1x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
