If you’re going to pick stocks, make sure to choose dominant companies with great margins and a wide moat. This will result in plump profit margins and an ever-widening gap between your stock and the competition.

A great example of this approach is found in a fantastic interview in a recent Barron’s profile of “index-crushing” mutual fund manager Timothy Parton. His JPMorgan Growth Advantage Select Fund JGASX, -0.75% has a five-star rating from investment researcher Morningstar, has significantly outpaced the S&P 500 SPX, -1.11% in the long-term, and lately has topped the performance of nine in 10 rivals.

So much for the death of active management.

Chinese stocks left out of key emerging-market index

Parton focuses his stock-picking energies on three kinds of stocks: so-called pioneers, innovators, and consolidators. The Barron’s article points out that the JPMorgan manager “favors companies that are ranked first or second in their industries. Ideally, these companies will have clear competitive advantages and high barriers to entry.”

Parton’s strategy reminded me of a great bit of research by Patrick O’Shaughnessy, published on his Investor Field Guide blog. The idea centered around profit margins in a “winner take all” economy, where a small group of companies dominate and make all the money, while the rest languish as bit players fighting for scraps.

The payoff comes from a great chart that effectively shows how margins have accelerated for the top tier of publicly traded stocks, while the lower tiers are being left farther and farther behind.

What kinds of stocks are in this “winner take all” club? Here are a few:

1. Apple

We’ll start with the obvious one, Apple AAPL, -3.17% . Naysayers continue to question how long the iPhone can keep up its tricks, but the bottom line is still the bottom line — and the fact that Apple accounted for 89% of all smartphone profits across all handsets at the end of last year shows its sheer dominance in margins.

This doesn’t just naturally juice Apple; it forces competitors compete on price. That results in miniscule profits for those who pursue market share, which is why the bottom line for Android OS device manufacturers is so anemic despite the reach of the platform.

Last quarter, Apple posted gross margins of 40.8% — up from 39.3% in the previous year, proving this trend is one that investors can rely on.

If you’re looking for the undisputed winner in mobile hardware, look no further than Apple.

2. VeriSign

For a different twist on tech dominance, it’s worth exploring Internet infrastructure play VeriSign VRSN, +0.58% . The domain registry service is the de facto marketplace for domain names, getting a cut anytime someone registers an Internet address.

According to a 2012 agreement with the Internet Corporation for Assigned Names and Numbers, a quasi-governmental “public-benefit corporation,” VeriSign is the sole provider of dot-com domains through 2018. With three years left on its ICANN contract and a push into add-on businesses for websites like cybersecurity, there’s a good chance its stock will continue to outperform.

3. Moody’s

Say what you want about the “three blind mice” ratings agencies that missed the 2008 financial crisis, but it’s hard to deny that Moody’s MCO, -0.66% is in a position of strength that leaves it quite entrenched as one of the major providers of credit ratings and related research.

This dominance and security is, in part, why Warren Buffett and Berkshire Hathaway BRK.A, +0.36% BRK.B, +0.07% have long trusted in Moody’s, owning roughly 12% of the company for a stake currently valued at about $2.6 billion.

As Moody’s puts more daylight between its crisis-era blunders, it looks better and better to investors and runs even less risk of being disrupted. Consider that in the last five years, Moody’s stock has exploded 460% — proving that it wasn’t permanently tarnished, and has emerged just as dominant as ever.

Big companies need access to capital markets, and Moody’s is one of the select gatekeepers for them — enjoying a 46% operating margin as a result of this elite status.

4. Monsanto

Seed giant Monsanto US:MON has an apt ticker, since it’s trying to put the “MON” in “legalized monopoly.” It’s genetically engineered seeds are the gold standard in America, with roughly 80% of corn and 90% of soybeans in the U.S. grown with traits developed by Monsanto’s biotech research.

On top of that, the company regularly sues farmers for not buying new batches of its patented seeds each year. You don’t get much deeper and wider a moat than forced sales to thousands of farmers every spring.

If that’s not a wide enough moat for you, consider that Monsanto is looking to acquire Swiss agrichemical giant Syngenta US:SYT for $45 billion (though Syngenta wants more) as a way to further dominate the crops business worldwide.

A potential risk to Monsanto is from regulators cracking down on GMOs or a shift in consumer behavior, but given the sheer dominance of Monsanto and the effectiveness of its products when it comes to increased yields for farmers, the risk seems neither acute nor immediate.

5. Grupo Aeroportuario del Sureste

Grupo Aeroportuario del Sureste ASR, -2.22% is an airport operator in Mexico that is enjoying the brisk growth of an emerging-market economy, coupled with the effective monopoly that comes with regional airports.

Grupo Aeroportuario owns and operates nine airports throughout Mexico, focusing on busy tourist hubs including Cancun, Cozumel and Veracruz. According to official data, Cancun is the fourth-busiest airport in Mexico and is projected to see more than 12% growth in traffic this year.

And because Grupo Aeroportuario enjoys an effective monopoly on those operations, that’s basically baked-in growth. No wonder operating profit jumped almost 23% last quarter.

Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com or Tweet him @JeffReevesIP.