Look for companies that have developed strong earnings power and are laser-focused on growth.
Stocks of such companies can often become multibaggers in a span of a few years.
Right now, a financial, an EV, and an industrials stock look like perfect monster stocks in the making.
While investing in stocks is one of the best ways to make your money work for you, some stocks have the power to generate monster returns and create massive wealth for shareholders over time. They're often industry-leading companies with solid earnings power and a hunger for growth, all of which eventually propel their stock prices higher and higher.
Here are three stocks that have generated huge returns in the past and look primed to generate monstrous returns over the next five years and beyond.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
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A magnificent stock with big catalysts
Mastercard (NYSE: MA) stock has delivered phenomenal returns over time, more than doubling investors' money in five years and generating 6x returns in 10 years. Here's the best part: Mastercard's revenue, net income, and cash flows have grown steadily over time, backing the stock's rally.
Mastercard is among the world's two largest payments processing companies. Its co-branded cards -- debit, credit, and prepaid -- are issued by financial institutions such as banks. Mastercard processes payments over its own network and earns fees. It also earns from value-added services like consulting, cybersecurity, and risk management. Overall, it's a huge business -- Mastercard has 1.1 billion cards in circulation worldwide, and it processed transactions worth $9.8 trillion in 2024.
It's also an asset-light business and, therefore, generates big margins and profits. In its just-reported first quarter, Mastercard grew its revenue by 14% year over year, driven largely by cross-border volume growth of 15%. It generated an operating margin of 57.2%. In the fiscal year ended Dec. 31, 2024, Mastercard's revenue grew by 12%, and its operating margin came in at 55.3%.
With Mastercard constantly innovating to deploy technologies like artificial intelligence into its solutions and the world increasingly shifting from cash to digital, the stock could continue to generate monster returns for investors for years to come.
You probably didn't know about this monster stock
Waste Management(NYSE: WM) is the kind of rare monster stock you'd want to own at all times. Now, this is a very boring business of collecting, recycling, and disposing of trash. However, you'd be surprised to know that Waste Management stock has generated nearly 50% in total returns in three years, 160% in five years, and a whopping 470% in 10 years. Waste Management's monster run could continue given its latest moves and plans.
After residential, commercial, and industrial waste, Waste Management added a fourth layer to its business last year: medical waste. It added this layer by acquiring Stericycle, the largest medical waste management company in North America. Waste Management now expects synergies worth $250 million through 2027 from the acquisition, double its original expectations. In the first quarter, the healthcare solutions segment (Stericycle) contributed roughly 10% to Waste Management's revenue. Its total revenue grew around 17% year over year.
Waste Management is now looking to scale up its core operations through acquisitions and says it has a "very robust pipeline of tuck-in opportunities." In an industry like this, growing inorganically is a norm as companies try to expand their footprint into existing and new markets.
Waste Management has temporarily suspended share repurchases to focus on cutting down debt. I believe that's a prudent move. Importantly, the company remains committed to dividends, meanwhile. Waste Management has increased its dividend for 22 consecutive years now.
This could be the biggest EV star
You've seen shares of Tesla(NASDAQ: TSLA) rise exponentially over the years, but there's another electric vehicle (EV) stock that's beating Tesla at its game. In fact, with Tesla's shares taking a big hit this year, BYD(OTC: BYDDY) stock is now outperforming Tesla over a one-year, three-year, and five-year framework. What matters more, though, is that BYD stock looks primed to generate monster returns in the coming years.
While China's BYD is already the largest EV maker on its soil, it also surpassed Tesla in terms of sales volumes and revenue (over $100 billion) in 2024 to become the world's largest EV maker. 2025 may be no different. While Tesla's sales fell 13% in the first quarter of 2025, BYD just reported its fifth straight month of record sales for April. BYD is also making a lot of money. In Q1, its net income jumped 100% year over year.
BYD is also one of the world's largest battery manufacturers, and that's a huge competitive advantage over peers in terms of costs and supply. BYD's global footprint and expansion are hard to beat, too. In just the month of April, it entered Switzerland, the Czech Republic, Slovakia, and Croatia, opened its first showroom in Peru, and broke ground on a manufacturing plant in Cambodia. Moreover, its ship, BYD Shenzhen, the world's largest carrier, started its maiden ocean voyage to Brazil.
With so much happening at BYD and given the pace at which it is growing, I expect this stock to continue generating monstrous returns over the next five years and beyond.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Tesla. The Motley Fool recommends BYD Company and Waste Management. The Motley Fool has a disclosure policy.
