3 Market-Beating Stocks with Competitive Advantages

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.

It’s clear there’s a strong connection between sustained earnings growth and hall-of-fame returns. Taking that into account, here are three market-beating stocks that deserve a spot on your list.

Samsara (IOT)

Return Since IPO: +43.2%

One of the few public companies where Marc Andreessen is a Board member, Samsara (NYSE:IOT) provides software and hardware to track industrial equipment, assets, and fleets.

Why Should You Buy IOT?

1. Customers view its software as mission-critical to their operations as its ARR has averaged 35% growth over the last year
2. Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
3. Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage

At $35.38 per share, Samsara trades at 12.3x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Boston Scientific (BSX)

Five-Year Return: +169%

Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE:BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.

Why Does BSX Catch Our Eye?

1. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 14.4% over the past two years
2. Estimated revenue growth of 14.5% for the next 12 months implies its momentum over the last two years will continue
3. Free cash flow margin increased by 4.3 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Boston Scientific is trading at $94.34 per share, or 32.6x forward price-to-earnings. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Barrett (BBSI)

Five-Year Return: +325%

Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.

Why Are We Positive On BBSI?

1. Operating margin improvement of 1.1 percentage points over the last five years demonstrates its ability to scale efficiently
2. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities
3. Rising returns on capital show management is finding more attractive investment opportunities

Barrett’s stock price of $39.57 implies a valuation ratio of 17.5x forward price-to-earnings. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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 United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.