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.
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 with room for further growth.
Howmet (HWM)
Five-Year Return: +892%
Inventing the first forged aluminum truck wheel, Howmet (NYSE:HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.
Why Will HWM Beat the Market?
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Market share has increased this cycle as its 14.5% annual revenue growth over the last two years was exceptional
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Share buybacks catapulted its annual earnings per share growth to 38.5%, which outperformed its revenue gains over the last two years
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Free cash flow margin jumped by 18.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Howmet is trading at $131.40 per share, or 41.4x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our full research report, it’s free .
Cencora (COR)
Five-Year Return: +230%
Formerly known as AmerisourceBergen until its 2023 rebranding, Cencora (NYSE:COR) is a global pharmaceutical distribution company that connects manufacturers with healthcare providers while offering logistics, data analytics, and consulting services.
Why Are We Bullish on COR?
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Massive revenue base of $303.2 billion gives it meaningful leverage when negotiating reimbursement rates
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Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
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Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $265.81 per share, Cencora trades at 17x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free .
Cardinal Health (CAH)
Five-Year Return: +203%
Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE:CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.
Why Are We Fans of CAH?
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Dominant market position is represented by its $222.3 billion in revenue, which creates significant barriers to entry in this highly regulated industry
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Sales outlook for the upcoming 12 months implies the business will have more momentum than most peers
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Earnings growth has topped the peer group average over the last five years as its EPS has compounded at 7.1% annually
Cardinal Health’s stock price of $131.50 implies a valuation ratio of 16x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free .
Stocks We Like Even More
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started by checking out 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free .