U.S. equities have shown resilience so far this year, rebounding from early volatility and climbing to record highs. Gains, however, have been highly uneven, driven largely by strong corporate earnings, AI-related optimism and a still-supportive economic backdrop, which have helped offset persistent macro concerns. Investor sentiment has continued to shift with changing Fed-rate expectations, swings in Treasury yields, oil-price volatility, geopolitical risks, particularly in the Middle East, and evolving trade developments with China. At the same time, signs of tech fatigue and renewed pressure from the bond market have contributed to choppier trading conditions.
Against such an operating environment, the traditional way of choosing stocks is a good idea. Sales growth provides a more reliable view for evaluating stocks compared with earnings-focused metrics. In this regard, stocks like MKS Inc. MKSI, UMB Financial Corporation UMBF and Clean Harbors, Inc. CLH are worth betting on.
Sales growth is one of the clearest indicators of a company’s underlying expansion. While earnings can be affected by several variables, revenues offer a more direct view of whether customers are buying more of a company’s products or services. Consistent sales growth may signal healthy demand, market-share gains, stronger pricing power, successful product launches, or expansion into new geographies and customer segments.
Sales growth can also provide the foundation for stronger profitability. As sales rise, companies may be able to spread fixed costs over a larger revenue base, improving operating leverage and supporting margin expansion over time. Still, sales growth should not be assessed in isolation. It is most meaningful when viewed alongside industry trends, peer performance, pricing dynamics and the broader economic backdrop.
The quality and durability of sales growth are equally important. Recurring revenues, repeat purchases, volume-driven gains and sustainable end-market demand are generally more valuable than growth driven by one-time factors. Companies that can deliver steady, high-quality sales growth across market cycles are often better positioned to generate reliable cash flows, reinvest in the business, strengthen their competitive position and create long-term shareholder value.
Selecting the Potential Winning Stocks
To shortlist stocks with impressive sales growth and a high cash balance, we have selected 5-Year Historical Sales Growth (%) greater than X-Industry and Cash Flow of more than $500 million as our main screening parameters.
But sales growth and cash strength are not the absolute criteria for selecting stocks. Hence, we have added other factors to arrive at a winning strategy.
P/S Ratio less than X-Industry: This metric determines the value placed on each dollar of a company’s revenues. The lower the ratio, the better it is for picking a stock since the investor is paying less for each unit of sales.
% Change F1 Sales Estimate Revisions (four weeks) greater than X-Industry: Estimate revisions, better than the industry, are often seen to trigger an increase in stock price.
Operating Margin (average last five years) greater than 5%: The operating margin measures how much every dollar of a company's sales translates into profits. A high ratio indicates that the company has good cost control and sales are increasing faster than costs — an optimal situation.
Return on Equity (ROE) greater than 5%: This metric will ensure that sales growth is translated into profits and the company is not hoarding cash. A high ROE means that the company is spending wisely and is, in all likelihood, profitable.
Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform, irrespective of the market environment. You can see the complete list of today’s Zacks #1 Rank stocks here.
3 Stocks With Solid Sales Growth to Buy
Andover, MA-based MKS is a global provider of instruments, subsystems and process control solutions that measure, monitor, deliver, analyze, power and control critical parameters of advanced manufacturing processes. MKSI has three business segments: Vacuum and Analysis, Photonics Solutions and Materials Solutions.
MKSI’s expected sales growth rate for 2026 is 20.5%. MKS carries a Zacks Rank #2 at present.
Headquartered in Kansas City, MO, UMB Financial provides banking services and asset servicing in the United States. UMBF has strategically aligned its operations into the following three reportable segments: Commercial Banking, Institutional Banking and Personal Banking.
UMB Financial’s expected sales growth rate for 2026 is 10.8%. UMBF currently sports a Zacks Rank #1.
Norwell, MA-based Clean Harbors is a leading provider of environmental, energy and industrial services in North America. CLH operates the largest number of hazardous waste incinerators, landfills and treatment, storage and disposal facilities.
CLH’s sales are expected to rise 4% in 2026. Clean Harbors carries a Zacks Rank #2 at present.
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MKS Inc. (MKSI): Free Stock Analysis Report
UMB Financial Corporation (UMBF): Free Stock Analysis Report
Clean Harbors, Inc. (CLH): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).