3 Market-Beating Stocks for Long-Term Investors

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. Keeping that in mind, here are three market-beating stocks that could turbocharge your returns.

Costco (COST)

Five-Year Return: +193%

Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ:COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.

Why Are We Bullish on COST?

1. Same-store sales growth averaged 5% over the past two years, showing it’s bringing new and repeat shoppers into its stores
2. Dominant market position is represented by its $268.8 billion in revenue, which compensates for its subpar gross margin
3. Industry-leading 34.2% return on capital demonstrates management’s skill in finding high-return investments

Costco’s stock price of $951.90 implies a valuation ratio of 49x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Sprouts (SFM)

Five-Year Return: +553%

Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ:SFM) is a grocery store chain emphasizing natural and organic products.

Why Is SFM on Our Radar?

1. Aggressive strategy of rolling out new stores to gobble up whitespace is prudent given its same-store sales growth
2. Comparable store sales rose by 6.6% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
3. Demand for the next 12 months is expected to accelerate above its six-year trend as Wall Street forecasts robust revenue growth of 11.6%

Sprouts is trading at $167.48 per share, or 34.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Herc (HRI)

Five-Year Return: +287%

Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE:HRI) provides equipment rental and related services to a wide range of industries.

Why Could HRI Be a Winner?

1. Annual revenue growth of 13.1% over the last five years was superb and indicates its market share increased during this cycle
2. Excellent operating margin of 18.5% highlights the efficiency of its business model, and its operating leverage amplified its profits over the last five years
3. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue

At $132.38 per share, Herc trades at 10.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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