These three stocks have outpaced the broader market over the past five years by combining strong revenue growth, expanding margins, and rising returns on capital.
The best-performing stocks typically sustain a trifecta of robust sales growth, increasing margins, and rising returns on capital over many years.
Raytheon (NYSE: RTX) has delivered a five-year return of 160%, making it one of the standout performers in the aerospace and defense sector.
Originally focused on refrigeration technology, RTX now provides a wide variety of products and services across the aerospace and defense industries.
The company’s organic revenue growth averaged 10.5% over the past two years, demonstrating that its core business does not rely on acquisitions to drive sales.
Annual earnings per share growth of 16.3% has exceeded revenue gains over the last five years, supported in part by a consistent share repurchase program.
RTX also expanded its free cash flow margin by 5.2 percentage points over the last five years, giving management more flexibility for investments, buybacks, and dividends.
At a stock price of $222.00, RTX trades at a forward price-to-earnings ratio of 30.2x, reflecting strong investor confidence in the company’s long-term outlook.
Axos Financial (NYSE: AX), originally founded as Bank of Internet USA in 1999 before rebranding in 2018, has returned 107% over the past five years.
The company provides digital banking, securities clearing, and investment advisory solutions to retail and business customers across the country.
Annual net interest income growth of 18.3% over the past five years reflects meaningful market share gains throughout this credit cycle.
Axos also boasts a best-in-class net interest margin of 4.8%, a figure that highlights the differentiated strength of its product suite relative to peers.
Share buybacks helped push annual earnings per share growth to 18.8%, outpacing the company’s already-strong revenue gains over the same period.
At $99.32 per share, Axos Financial currently trades at 1.6x forward price-to-book, offering investors a potentially attractive entry point into a high-performing digital bank.
Old Second Bancorp (NASDAQ: OSBC), dating back to 1871, is one of the Chicago area’s longest-standing financial institutions and has posted a five-year return of 117%.
The Illinois-based community bank offers deposit services, commercial and consumer loans, wealth management, and mortgage products through its 53 branch locations.
Annual net interest income growth of 29.2% over the past five years is a remarkable figure that points to aggressive and successful market share expansion.
Old Second Bancorp also carries a best-in-class net interest margin of 5%, underpinned by a consistently strong-performing loan book.
The bank’s efficiency ratio improved by 10.6 percentage points over the last five years, demonstrating a clear ability to scale operations without sacrificing cost discipline.
Old Second Bancorp trades at $25.83 per share, or 1.4x forward price-to-book, making it a modestly valued option among community banks with a proven long-term track record.
