Most investors are seeking outperformance when buying stocks. One of the most popular measures of investment outperformance is alpha.

Put simply, alpha is a financial metric that compares the performance of a given investment, with a suitable index for that investment.

Investors looking to outperform over the long run should take a closer look at high alpha stocks.

Alpha is one of several performance measures that are commonly used to evaluate an investment security or portfolio.

The following 3 stocks have high alpha scores, and pay dividends to shareholders.

Meta Platforms Inc. (META)

Meta Platforms, previously known as Facebook, is multinational technology conglomerate founded by Mark Zuckerberg The company is known for its social media platforms, including Facebook, Instagram, and WhatsApp, and has also been investing in emerging technologies such as augmented reality (AR) and virtual reality (VR) through its Oculus subsidiary.

With nearly 4 billion people logging into at least one of Meta’ platforms every month, the company attracts nearly 20% of all global advertising revenue, second only to Alphabet (GOOGL), which commands a substantial 40% market share. Meta Platforms generates nearly $165 billion in annual revenue.

On January 29th, 2025, Meta Platforms reported its Q4 and full-year results for the period ending December 31st, 2024. For the quarter, Meta posted revenues of $48.4 billion, marking a tremendous growth of 20.6% compared to last year. Revenue growth was driven by increased user activity, growth in ad impressions, and higher ad pricing.

Specifically, Meta Platforms’ Family daily active people (DAP) were 3.35 billion on average at the end of the quarter, an increase of 5% year-over-year. Ad impressions delivered across Meta’s Family of Apps increased by 6% year-over-year, while the average price per ad increased by 14% year-over-year. Earnings-per-share increased 50% to $8.02.

For Q1-2025, Meta expects revenues to be in the range of $39.5 billion and $41.8 billion, up 12% at the midpoint.

Meta Platforms is a high-quality company featuring a wide moat, impressive margins, and a clean balance sheet. Its social media platforms provide some of the places for advertisers to grow their brands, while its high-margin business model ensures consistent profitability.

Morningstar Inc. (MORN)

Morningstar was founded in 1984 as a way for investors to seek information about hundreds of popular mutual funds that was out of reach prior to the company’s Sourcebook product. Since that time, Morningstar has grown tremendously, now serving about nine million clients. It produces ~$2.5 billion in annual revenue.

Morningstar posted fourth quarter and full-year earnings on February 26th, 2025, and results were better than expected on both the top and bottom lines. Adjusted earnings-per-share came to $2.14, beating expectations by eight cents. Revenue was up almost 10% year-over-year to $591 million, ahead of estimates by $10.2 million. Revenue was up 10.6% on an organic basis year-over-year, which excludes the impact of divestitures and forex translation.

Morningstar Credit and PitchBook were the largest contributors to revenue growth. Operating income was up 7.7% on an adjusted basis year-over-year. Earnings were up 8.6% on an adjusted, per-share basis year-over-year. Cash provided by operating activities rose 11.3% to $153 million, and free cash flow was up 4.6% to $113 million. Share repurchases were 33.3k for $11.6 million.

Morningstar’s competitive advantage is in its very long operating history in a niche of the investment world it helped create. The company’s subscription service, particularly with its PitchBook product, is a key differentiator and we see it powering future growth for many years to come.

MORN has increased its dividend for 14 consecutive years.

Stepan Co. (SCL)

Stepan Co. was founded in 1932 and at the outset, it sold only one product: a chemical to keep dust down on Illinois’ country roads. Since that time, it has grown to manufacture basic and intermediate chemicals, with surfactants making up most of its revenue. It should do about $2.3 billion in revenue this year.

Stepan is also a Dividend King, having increased its payout for 57 consecutive years.

The company posted fourth quarter and full-year earnings on February 19th, 2025. Revenue was down 1.2% year-on-year to $526 million, but did beat estimates by almost $5 million. Adjusted earnings-per-share came to 12 cents. Global sales volume was off 1% year-over-year as double-digit growth in surfactants was offset and then some by demand weakness in polymers. Surfactants were up 3% year-over-year in Q4 to $379 million.

Cash from operations came to $68 million during the quarter, while free cash flow was $32 million. EBITDA for the year was $187 million on an adjusted basis.

The company’s competitive advantage is in its diverse, global customer base and many decades of engineering experience. Stepan’s competitors cannot easily supplant its position with existing customers given the often-custom nature of what Stepan engineers for them.

Stepan’s payout ratio is about 43% of earnings, which indicates a secure dividend payout.

Disclosure: No positions in any stocks mentioned

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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul