Top 25 Good Companies That Could Be About to Break Out
Marvin's rules found 25 strong companies whose stocks have moved little over the past year. A quiet stretch is not a forecast, so treat this as a list to research, not a promise of a breakout.
A "breakout" usually means a stock moving out of a long, flat stretch. This list starts from that idea. It shows 25 companies that Marvin rates as good businesses and whose stocks have not moved much over the past year.
Being on the list does not mean a company is about to jump, and nobody can say when or whether that happens. A quiet stock can stay quiet or fall. The list is a starting point for research into solid companies that the market has not been excited about lately.
When you read the picks, look at both the strengths and the cautions. Some companies have excellent margins but thin growth, some carry more debt, and some have gaps in the data.
The list
How Marvin ranked these stocks
Marvin picked potential breakouts as good companies whose stock has not moved much over the past year. The companies are ranked by their quality score, which comes first, with the overall score also shown. Every score runs from 0 to 100 and compares a company only with other companies in its own industry, so a score in one industry is not directly comparable with a score in another. Scores describe today and are not predictions.
Potential breakouts: good companies whose share price has not moved much over the past year
The stocks, one by one
NVIDIA Corporation NVDA
NVIDIA's overall score is 97, backed by revenue growth of 65.5% and an operating margin of 65.2%. That suggests very fast growth with very strong profits, and debt-to-equity of 0.17 is low. Caution: scores only compare it with other chip companies today and say nothing about what comes next.
Amazon.com, Inc. AMZN
Amazon has a quality score of 97 and revenue growth of 12.4%, which suggests a solid, growing business. Its operating margin is a modest 12.1%. Caution: its free cash flow margin is -1.5%, below zero, meaning it used more cash than it produced in the last fiscal year.
Cincinnati Financial Corporation CINF
Cincinnati Financial combines a quality score of 88 with a free cash flow margin of not reported, a return on equity of 20.0% and very low debt-to-equity of 0.05. Caution: operating margin is not available, and its opportunity score of 59 is well below its quality score.
Edwards Lifesciences Corporation EW
Edwards Lifesciences shows a gross margin of 77.8% and an operating margin of 22.3%, which suggest strong profitability for a medical device maker. Revenue growth was 11.5%. Caution: return on equity is only 9.5%, its opportunity score is 22, and debt data is missing.
Visa Inc. V
Visa has an operating margin of 61.1% and a free cash flow margin of not reported, very strong figures for a payments company, plus revenue growth of 11.3%. Caution: its opportunity score is only 67, and return on equity and debt figures are not available.
Addus HomeCare Corporation ADUS
Addus HomeCare grew revenue by 23.2% and carries very little debt, with debt-to-equity of 0.09. Caution: margins are thin, with an operating margin of 10.0% and a gross margin of 32.4%, and return on equity is a modest 9.2%.
American States Water Company AWR
American States Water has an overall score of 95, an operating margin of 31.8% and revenue growth of 10.5%, a healthy mix for a regulated utility. Caution: free cash flow margin is just 3.0%, and debt-to-equity of 0.65 is higher than many peers on this list.
The Procter & Gamble Company PG
Procter & Gamble has an operating margin of 22.7% and a free cash flow margin of 17.4%, suggesting solid profits and cash generation. Caution: revenue growth was only 3.3%, which is slow, and return on equity and debt figures are not available.
VeriSign, Inc. VRSN
VeriSign stands out for an operating margin of 67.9% and a free cash flow margin of 62.4%, extremely strong for any business. Caution: revenue growth was just 6.4%, its opportunity score is 61, and return on equity and debt figures are missing.
Cintas Corporation CTAS
Cintas has a return on equity of 39.6% and an operating margin of 23.4%, with moderate debt-to-equity of 0.33. That suggests an efficient, profitable business. Caution: its opportunity score is only 40, and revenue growth of 8.9% is steady rather than fast.
Balchem Corp BCPC
Balchem has an overall score of 93, an operating margin of 20.4% and revenue growth of 8.8%, pointing to a steadily profitable specialty chemicals business. Caution: its opportunity score is only 36, and free cash flow and debt figures are not available.
Berkshire Hathaway Inc. BRK-A
Berkshire Hathaway (BRK-A) has a quality score of 94, a free cash flow margin of not reported and a return on equity of 11.5%. Caution: revenue growth was essentially flat at 0.0%, and operating margin and debt figures are not available.
Costco Wholesale Corporation COST
Costco grew revenue by 10.1% and earned a return on equity of 25.8%, showing steady growth and efficient use of shareholder money. Caution: margins are thin, with a gross margin of 12.8% and an operating margin of 3.9%, and the opportunity score is 29.
Perdoceo Education Corporation PRDO
Perdoceo Education scores 95 overall and 94 for opportunity, with revenue growth of 24.2%, an operating margin of 24.6% and a free cash flow margin of 25.4%. Caution: gross margin and debt figures are not available.
Waste Management, Inc. WM
Waste Management grew revenue by 14.2%, with an operating margin of 17.6% and a return on equity of 28.7%, suggesting steady growth and good profitability. Caution: debt-to-equity of 2.35 is the highest on this list among companies with debt data, so borrowing deserves a closer look.
Trustmark Corporation TRMK
Trustmark, a regional bank, has a quality score of 94 and an opportunity score of 81, with a return on equity of 10.9%, which is moderate. Caution: growth, margin, cash flow and debt figures are not available, so the picture is incomplete.
SouthState Bank Corp. SSB
SouthState Bank, a regional bank, has a quality score of 92 and an opportunity score of 82, with a return on equity of 10.4%, which is moderate. Caution: growth, margin, cash flow and debt figures are not available, so the picture is incomplete.
Cigna Corporation CI
Cigna grew revenue by 11.2% and earned a return on equity of 15.1%, a decent showing for a health plan company. Caution: its operating margin is thin at 3.1% and gross margin is 20.6%, and free cash flow and debt figures are not available.
Veralto Corporation VLTO
Veralto earned a return on equity of 32.2%, with an operating margin of 23.1% and a free cash flow margin of 18.6%, suggesting strong profits. Caution: revenue growth was only 6.0%, its opportunity score is 52, and debt-to-equity is 0.96.
Berkshire Hathaway Inc. BRK-B
Berkshire Hathaway (BRK-B) has a quality score of 96, a free cash flow margin of not reported and a return on equity of 11.5%. Caution: revenue growth was essentially flat at 0.0%, and operating margin and debt figures are not available.
Exponent, Inc. EXPO
Exponent has a quality score of 93 and a high return on equity of 38.7%, though revenue growth was a modest 4.2%. Caution: its opportunity score is 32, and margin, cash flow and debt figures are not available.
Darden Restaurants, Inc. DRI
Darden Restaurants has an overall score of 96 and an opportunity score of 93, with a return on equity of 57.2% and an operating margin of 11.7%. Caution: debt-to-equity of 4.15 is high, which means it relies heavily on borrowing.
Meta Platforms, Inc. META
Meta Platforms grew revenue by 22.2% and has an operating margin of 38.1% and a gross margin of 81.7%, showing fast growth with strong profits. Caution: its free cash flow margin is lower at 18.0%, and its opportunity score is 76.
NewMarket Corporation NEU
NewMarket has an operating margin of 20.0% and a return on equity of 23.6%, suggesting a profitable specialty chemicals business with moderate debt. Caution: revenue shrank in the last fiscal year, with growth of -2.2%, and its gross margin is 31.5%.
Altria Group, Inc. MO
Altria has a very high operating margin of 46.8% and a free cash flow margin of 38.8%, plus an opportunity score of 87. Caution: revenue fell in the last fiscal year, with growth of -3.1%, and return on equity and debt figures are not available.
Common questions
What does a stock "breaking out" mean?
It usually means a stock moves out of a long, flat range, often after a quiet period. It is a description of past movement, not a promise. A stock can sit in a range for a long time or move the other way, so it is worth understanding the business first.
Does a quiet year mean a company is a good opportunity?
Not by itself. A flat year only shows the stock has not moved much. Marvin pairs that with business quality, such as margins, growth and debt, so you can see whether the company looks healthy. Even then, scores describe today and do not predict what comes next.
Why do some companies on this list have low opportunity scores but high quality scores?
Quality and opportunity are separate scores, each compared with other companies in the same industry. A company can have excellent profits and low debt, which lifts quality, yet score lower on opportunity against its industry peers. That is why both scores are worth reading.
Keep reading
- Top 20 Defensive Stocks Ranked by Marvin Business Quality
- Top 15 Financial Services Companies With the Strongest Businesses
- Top 15 Consumer Defensive Companies by Business Quality
- Top 20 Companies With the Strongest Businesses
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Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.