Companies that consistently increase their sales, margins, or returns on capital are usually rewarded with the best returns, and those that can do all three for years on end are almost always the legendary stocks that return 100 times your 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 could turbocharge your returns.
Hubbell (HUBB)
Five-Year Return: +233%
A respected player in the electrical segment, Hubbell (NYSE: HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Why Are We Positive On HUBB?
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 24.9% annually
- ROIC punches in at 25.1%, illustrating management’s expertise in identifying profitable investments, and its rising returns show it’s making even more lucrative bets
At $337.10 per share, Hubbell trades at 19x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Granite Construction (GVA)
Five-Year Return: +415%
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE: GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Why Could GVA 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 43.3% over the last two years outstripped its revenue performance
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Granite Construction is trading at $73.40 per share, or 13.5x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.
Eli Lilly (LLY)
Five-Year Return: +518%
Founded in 1876 by a Civil War veteran and pharmacist who was frustrated with the poor quality of medicines available at the time, Eli Lilly (NYSE: LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.
Why Is LLY a Top Pick?
- Annual revenue growth of 25.6% 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
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Eli Lilly’s stock price of $823.00 implies a valuation ratio of 34.2x forward price-to-earnings. Is now the right time to buy? See for yourself in our full 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.
