All companies are situated in one of the Earnings Power Chart's four boxes. The best box is the upper-right; companies here possess authentic earnings power because they are profitable the way our pessimistic defensive and optimistic enterprising investor think about profits. For the conservative growth investor, these are the best companies to own.

A special type of company is the Earnings Power Staircase. Not only is this company profitable on a defensive and enterprising basis, it also keeps moving in an upper-right direction to forge an Earnings Power Staircase, so-named because of the distinctive "staircase-like" pattern created by the intersection of defensive and enterprising profits.

Here are five companies that forged Earnings Power Staircases during the ascendant phase of their life cycles, and each generated huge capital gains for their stockholders in the process.

A $10,000 investment in Apollo Group in August 1999 was worth $78,000 five years later.

A $10,000 investment in Cisco Systems in July 1990 was worth $631,000 six years later.

A $10,000 investment in Dell in January 1994 grew to $1.3 million over the next five years.

If you bought $10,000 worth of Microsoft shares in June 1990, your investment was worth $415,000 by the decade's end.

A $10,000 investment in Paychex in May 1992 grew to $257,000 over the next nine years.

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The common denominator of these five Hall of Fame wealth creators is each forged an Earnings Power Staircase. When a company forges an Earnings Power Staircase, this is your hallmark of conservative growth. Not only is the company getting bigger, it is also getting better.

If you are trying to find "the next Microsoft," check whether the company produces rising levels of defensive and enterprising profits. If the company is forging an Earnings Power Staircase, then you may have found a conservative growth stock for long-term capital gains.

Good luck!