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3 Market-Beating Stocks for Long-Term Investors
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.
Lam Research (LRCX)
Five-Year Return: +243%
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Why Do We Love LRCX?
- Market share has increased this cycle as its 11.2% annual revenue growth over the last two years was exceptional
- Free cash flow margin expanded by 9.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- ROIC punches in at 64.3%, illustrating management’s expertise in identifying profitable investments
Lam Research’s stock price of $168.75 implies a valuation ratio of 34.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Dutch Bros (BROS)
Return Since IPO: +67%
Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE:BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Why Is BROS a Good Business?
- Rapid rollout of new restaurants to capitalize on market opportunities makes sense given its strong same-store sales performance
- Same-store sales growth over the past two years shows it’s successfully drawing diners into its restaurants
- Free cash flow margin expanded by 5.1 percentage points over the last year, providing additional flexibility for investments and share buybacks/dividends
Dutch Bros is trading at $61.25 per share, or 73.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Reddit (RDDT)
Return Since IPO: +363%
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Are We Backing RDDT?
- Domestic Daily Active Visitors have grown by 32.3% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Earnings per share grew by 40.3% annually over the last three years and trumped its peers
- Free cash flow margin increased by 41.8 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $233.37 per share, Reddit trades at 43.9x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% 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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