Astronics, Amgen, and Ares Top Market-Beating Stocks with Strong Potential

When it comes to investing in the stock market, companies that consistently increase their sales, margins, or returns on capital tend to be rewarded with strong returns. Over a long period, earnings growth often goes hand-in-hand with big winners.

Astronics (ATRO) is one such company. With a five-year return of 484%, the provider of technologies and services to the global aerospace, defense, and electronics industries has seen impressive revenue growth of 16.5% over the past five years.

The company's free cash flow margin expanded by 10.3 percentage points over the last five years, providing flexibility for investments and share buybacks/dividends. Improving returns on capital suggest its past investments are beginning to deliver value.

Other market-beating stocks include Amgen (AMGN), which has a five-year return of 95.9%. Founded in 1980 during the biotechnology revolution, Amgen discovers, develops, and manufactures innovative medicines for serious illnesses like cancer, osteoporosis, and autoimmune diseases.

Ares (ARES) is another top pick, with a five-year return of 94.9%. With roots in the leveraged finance group of Apollo Management, Ares manages private equity, credit, real estate, and infrastructure assets for institutional and high-net-worth clients.