These 'steady compounders' have delivered superior earnings growth for the past decade, Bank of America says

CNBC

3 days ago

A slate of companies that have posted "consistent and superior" earnings growth over the past 10 years could be poised for strong performances and are worth watching, according to Bank of America. "Since data began in 1998, the Global Steady Compounders have annualized 5.2% outperformance versus the MSCI AC World Index and have outperformed in more months than most strategies we monitor," strategist Nigel Tupper wrote in a Tuesday note. "Stocks screening as Steady Compounders tend to outperform for extended periods." There are circumstances in which "steady compounders" don't fare well. Tupper wrote that the names tend to underperform when bond yields rise with inflation and in "significant" risk-on market periods, given that the stocks reflect earnings stability. The strategist screened for stocks that have an average score of above 95 out of 100 based on 10-year earnings growth, "stable" earnings growth, the stock's two-year earnings per share growth forecast, earnings revisions and its 12-month return. The current earnings season has been solid thus far, which has helped send the market to new highs . Of the 199 S & P 500 companies that have reported earnings, nearly 82% have beaten expectations, per FactSet. Here are some of the names that popped up in the U.S. "steady compounders" screen. Global payments technology company Visa was among the names tied for the highest score on the list, with a score of 100 in the steady compounders rank. Shares have outperformed the S & P 500 in 2025, rising nearly 12%, versus the broad market index's roughly 8% gain during the period. Visa is scheduled to report its quarterly results for the fiscal third quarter after the bell Tuesday. Analysts surveyed by LSEG are expecting the company to post double-digit-percentage earnings and revenue growth compared to the prior-year period. Most analysts on Wall Street are bullish on Visa, as 32 out of 40 total analysts have a strong buy or buy rating on the name, per LSEG data. Microsoft , which reports after the bell on Wednesday, had a score of 100 as well. Analysts expect the "Magnificent Seven" company to post around 14% earnings and revenue growth year over year. The stock has similarly outpaced the broader market, seeing a meaningful advance in 2025 of more than 21%. Like Visa, a majority of the Street is optimistic on the stock's trajectory over the next several months, with 56 among the 62 analysts covering it having a strong buy or buy rating. Financial technology platform Intuit also made the cut at 100 in the steady compounders rank. The stock has soared more than 27% in 2025 and around 35% over the past six months, outperforming the broader market. The company is slated to post its earnings results in late August.