Content from Fool
These companies have excellent earnings growth prospects to fuel market-beating returns for investors.
The Nasdaq Composite has returned an average annual return of 11% over the last 30 years. That comes out to a cumulative return of 2,440%. That’s an enviable return on investment over the long term. If you want to beat that return, you need to invest in stocks with above-average growth prospects.
Stock prices can fluctuate for all kinds of reasons in the near term, so trying to beat the market day to day is a fool’s errand. However, over many years, there is a high correlation between a company’s earnings performance and the stock’s return. If you focus on companies that can at least double their earnings in five years, which comes to an annualized earnings increase of 15%, you significantly stack the odds in your favor of beating the market.
To give you some ideas, here are two top stocks that have the potential to double in value in five years and outperform the Nasdaq.