Shares of ARM Holdings (LSE: ARM), BT Group (LSE: BT) and BAE Systems (LSE: BA) have raced ahead of a flat FTSE 100 over the past five years. Is this growth set to repeat itself in the next half decade?

Chip designer ARM’s shares have been unfairly tied to those of Apple, one of its largest customers. As Apple has warned of slowing iPhone demand, ARM shares have stayed relatively flat over the past three years despite profits increasing 63%. Slowing growth in global smartphone sales could hinder ARM, but it has wisely diversified into chips for Internet of Things devices such as cars and wearables. A 2014 Canalys survey found 80% of all wearable devices contain ARM chips, and non-smartphone chips now account for 55% of all sales.

Over the next five years, growth may slow for ARM but the long-term outlook remains bright. In 2015 the company increased revenue by 22% and profits a full 33% thanks to operating margins that stand at a staggering 51.6%. Impressive cash generation also facilitated a 25% increase to the dividend and a modest share buyback programme, which are both set to continue in 2016. ARM’s price-to-earnings ratio is down from a sky-high 74.5 in 2013 to 27 times forecast 2016 earnings. With earnings expected to once again increase 33%, this could be a great opportunity for investors to begin a position in a long-term winner.

Warning – change ahead!

BT has proved over the past five years that monopolies do indeed pay handsomely. The telecoms giant has sole ownership of the broadband and fixed line pipes in most of the UK through its control of Openreach. BT charges competitors a pretty penny for access, and raked in 41% of its pre-tax earnings from Openreach in the past year. However, as political opposition to this arrangement mounts and industry regulator Ofcom weighs-in on possible actions, it looks likely that BT may not enjoy this advantage over the coming five years.

Any regulator-mandated change to the current Openreach agreement would come at a very inopportune time for BT. It has spent a fortune on content, £2bn alone on sports rights, and £12.5bn for mobile operator EE in order to better compete for the profitable bundle customer. However, competition in this sector is increasing by the day (see Sky’s roll-out of its own mobile offering this year) and profits at BT are expected to stagnate in the coming years. Stuck in a highly competitive sector and with regulatory changes on the horizon, I don’t believe the next five years will be as kind to BT shares as they were in the preceding five.

Can growth last?

Defence contractor BAE Systems has benefited recently from a slight uptick in global defence spending and increased revenue for the first time in five years. Management has done well over these five tough years to keep profits flat by dramatically slashing costs and moving into less-lumpy segments such as electronic systems and cyber security. However, major defence contracts still provide the bulk of revenue and this remains a highly cyclical industry reliant on budgets in the UK, US and Saudi Arabia to continue increasing. Given this challenge, I don’t foresee runaway growth over the next five years but an attractive 4.2% dividend could keep income investors happy.

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Ian Pierce has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.