Consistent 3-Year Sales and Profit Growth — US Stocks with Sustained Revenue and Earnings Expansion

Both revenue and net income have grown in each of the three consecutive most recent annual periods — Year 1 above Year 2, Year 2 above Year 3, Year 3 above Year 4. This confirms three years of uninterrupted top-line and bottom-line expansion simultaneously. It's a medium-term trend confirmation that single-year screens cannot provide.

A single year of strong growth can reflect easy comparisons, one-time sales, or favorable macro timing. Three consecutive years of both revenue and profit growth across varied market conditions, customer renewal cycles, and competitive environments demonstrates a durable growth engine. The probability of three consecutive 'lucky years' is far lower than one fortunate year.

Both matter, and this screen requires both. Revenue growth alone could mask deteriorating margins. Profit growth alone could reflect cost-cutting that ultimately constrains revenue. Three consecutive years of both simultaneously is the strongest signal of sustainable, quality business expansion — top-line demand is real and profitable, bottom-line conversion is intact.

Consistent 5-Year Earnings requires positive net income (profitability) in every year but not necessarily growth. This screen requires both revenue AND profit to be higher each year — directional growth, not just profitability. The 5-year earnings screen tests durability; the 3-year growth screen tests trajectory. Combined, they identify the most consistently growing AND consistently profitable businesses.

Yes — acquisitions can add revenue and profit in the year of completion, creating apparent consistent growth if timed across three years. Always check the earnings release for 'organic' or 'same-store' growth figures that exclude acquisition contributions. Three years of organic (same-store) growth is a much stronger signal than three years of acquisition-boosted reported growth.

Revenue CAGR above 10% over three years is solid; above 15% is strong; above 20% is excellent. Profit CAGR above 10% is solid; above 15% is strong; above 20% with consistent revenue growth is exceptional. The direction (growth) is confirmed by the screen; the magnitude within the results determines the quality of the growth signal.

Technology (especially software and services), healthcare (pharma, medical devices, healthcare IT), consumer discretionary (expanding brands and e-commerce), and financial services (well-managed banks and insurance during expansion phases). Capital-intensive or commodity-driven sectors (energy, mining, shipping) are less likely to show three consecutive years of both metrics growing due to price cycle volatility.

This screen is best used as a quality confirmation step for stocks identified by other screens. A stock appearing on Magic Formula AND Consistent 3-Year Growth has both the quality-value credentials and the growth track record. A stock from Low PE High ROE AND this screen is cheap, quality, and has a growth record. Stacking multiple quality signals is the most reliable approach to high-conviction stock selection.

Revenue can decline while profit grows only if margins expand dramatically — through cost-cutting, pricing increases, or mix shift to higher-margin products. This technically fails this screen since revenue must also grow each year. The screen specifically requires both, preventing the cost-cutting-driven profit improvement from qualifying. Genuine business quality shows in both metrics growing together.

Acquisition effects appear in all periods after the deal closes. If a company made a large acquisition in Year 3 (three years ago), the Year 2 comparison would include the acquired business, but Year 3 vs. Year 4 comparisons would not. The screen captures the reported figures — organic growth analysis requires reading the breakdown in each year's earnings release or 10-K.