3 Market-Beating Stocks with Competitive Advantages

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.

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

RTX (RTX)

Five-Year Return: +160%

Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a variety of products and services to the aerospace and defense industries.

Why Is RTX Interesting?

1. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 10.5% over the past two years
2. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 16.3% exceeded its revenue gains over the last five years
3. Free cash flow margin expanded by 5.2 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

RTX’s stock price of $222.00 implies a valuation ratio of 30.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Axos Financial (AX)

Five-Year Return: +107%

Originally founded as Bank of Internet USA in 1999 before rebranding in 2018, Axos Financial (NYSE:AX) is a diversified financial services company that provides digital banking, securities clearing, and investment advisory solutions to retail and business customers nationwide.

Why Should You Buy AX?

1. Annual net interest income growth of 18.3% over the past five years was outstanding, reflecting market share gains this cycle
2. Differentiated product suite is reflected in its best-in-class net interest margin of 4.8%
3. Share buybacks catapulted its annual earnings per share growth to 18.8%, which outperformed its revenue gains over the last five years

At $99.32 per share, Axos Financial trades at 1.6x forward P/B. Is now the right time to buy? See for yourself in our full research report, it’s free.

Old Second Bancorp (OSBC)

Five-Year Return: +117%

Dating back to 1871 as one of the Chicago area's longest-standing financial institutions, Old Second Bancorp (NASDAQ:OSBC) is an Illinois-based community bank offering deposit services, commercial and consumer loans, wealth management, and mortgage products through its 53 branch locations.

Why Does OSBC Stand Out?

1. Annual net interest income growth of 29.2% over the past five years was outstanding, reflecting market share gains this cycle
2. Strong performance of its loan book results in a best-in-class net interest margin of 5%
3. Efficiency ratio improvement of 10.6 percentage points over the last five years demonstrates its ability to scale effectively

Old Second Bancorp is trading at $25.83 per share, or 1.4x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.