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.
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.
Federal Signal (FSS)
Five-Year Return: +220%
Developing sirens that warned of air raid attacks or fallout during the Cold War, Federal Signal (NYSE:FSS) provides safety and emergency equipment for government agencies, municipalities, and industrial companies.
Why Is FSS a Good Business?
- Backlog has averaged 10.8% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Operating margin improvement of 4.1 percentage points over the last five years demonstrates its ability to scale efficiently
- Earnings per share grew by 28.7% annually over the last two years and trumped its peers
Federal Signal’s stock price of $94.07 implies a valuation ratio of 24.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Hubbell (HUBB)
Five-Year Return: +203%
A respected player in the electrical segment, Hubbell (NYSE:HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Why Could HUBB Be a Winner?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 16.6% over the last two years outstripped its revenue performance
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its rising returns show it’s making even more lucrative bets
At $389.58 per share, Hubbell trades at 21.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Curtiss-Wright (CW)
Five-Year Return: +333%
Formed from a merger of 12 companies, Curtiss-Wright (NYSE:CW) provides a range of products and services to the aerospace, industrial, electronic, and maritime industries.
Why Is CW on Our Radar?
- Impressive 10.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Share buybacks catapulted its annual earnings per share growth to 18.2%, which outperformed its revenue gains over the last two years
Curtiss-Wright is trading at $436 per share, or 35.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free.