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.
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.
Seagate (STX)
Five-Year Return: +933%
One of two remaining major hard drive manufacturers after decades of industry consolidation, Seagate (NASDAQ:STX) manufactures hard disk drives and solid state drives that store data in data centers, cloud systems, and consumer devices.
Why Do We Love STX?
- Market share has increased this cycle as its 36.4% annual revenue growth over the last two years was exceptional
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Free cash flow margin increased by 14.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Seagate is trading at $902.28 per share, or 23.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Cadence Design Systems (CDNS)
Five-Year Return: +70.9%
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ:CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Why Do We Like CDNS?
- Billings have averaged 17.9% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Prominent and differentiated software leads to a best-in-class gross margin of 86.8%
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
At $283.58 per share, Cadence Design Systems trades at 12.1x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Incyte (INCY)
Five-Year Return: +71.2%
Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ:INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.
What Makes INCY Stand Out?
- Annual revenue growth of 22.8% over the past two years was outstanding, reflecting market share gains this cycle
- Free cash flow margin grew by 12.6 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are growing as management capitalizes on its market opportunities
Incyte’s stock price of $124.41 implies a valuation ratio of 53.7x 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 meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.