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 with room for further growth.
O'Reilly (ORLY)
Five-Year Return: +118%
Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ:ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.
Why Will ORLY Outperform?
- Same-store sales growth averaged 4.9% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Healthy operating margin of 19.4% shows it’s a well-run company with efficient processes
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
O'Reilly is trading at $85.43 per share, or 24.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Watts Water Technologies (WTS)
Five-Year Return: +100%
Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Why Is WTS a Good Business?
- 9.9% annual revenue growth over the last five years surpassed the sector average as its offerings resonated with customers
- Share buybacks catapulted its annual earnings per share growth to 19.2%, which outperformed its revenue gains over the last five years
- Free cash flow margin increased by 6.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Watts Water Technologies’s stock price of $349.95 implies a valuation ratio of 26.7x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
The Bancorp (TBBK)
Five-Year Return: +112%
Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp (NASDAQ:TBBK) is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.
Why Could TBBK Be a Winner?
- Impressive 18% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Efficiency ratio improvement of -6.1 percentage points is projected for next year as the firm achieves greater operating leverage
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
At $50.31 per share, The Bancorp trades at 2.7x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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.