The 20 Best-Performing Stocks of the Last Decade
Hindsight is 20/20. It can be incredibly difficult to pick the “next big stock” in the moment, but looking back gives us clarity on where we could have reaped the highest rewards. While some of the decade’s chart-toppers—like Netflix and Amazon—are household names, other stocks may come as a surprise.
Today’s visualization reveals the best-performing stocks over the last 10 years, and shows how much an initial $100 investment would be worth today.
To compile the list, MarketWatch reviewed the current S&P 500 constituents and excluded any stocks that have traded in their present form for less than 10 years. The remaining companies were sorted based on their total return, with reinvested dividends, from December 31, 2009 to December 5, 2019.
So, which stocks come out on top? Here’s a full list of the top 20, organized by ranking:
|Rank||Company||Ticker||Final Value of $100 Investment||S&P 500 Sector|
|1||Netflix Inc.||NASDAQ: NFLX||$3,867||Communication Services|
|2||MarketAxess Holdings Inc.||NASDAQ: MKTX||$3,282||Financials|
|3||Abiomed Inc.||NASDAQ: ABMD||$2,221||Health Care|
|4||TransDigm Group Inc.||NYSE: TDG||$2,165||Industrials|
|5||Broadcom Inc.||NASDAQ: AVGO||$2,019||Information Technology|
|6||Align Technology Inc.||NASDAQ: ALGN||$1,558||Health Care|
|7||United Rentals Inc.||NYSE: URI||$1,534||Industrials|
|8||Regeneron Pharmaceuticals Inc.||NASDAQ: REGN||$1,530||Health Care|
|9||Ulta Beauty Inc.||NASDAQ: ULTA||$1,333||Consumer Discretionary|
|10||Amazon.com Inc.||NASDAQ: AMZN||$1,309||Consumer Discretionary|
|11||Extra Space Storage Inc.||NYSE: EXR||$1,266||Real Estate|
|12||Constellation Brands Inc. Class A||NYSE: STZ||$1,224||Consumer Staples|
|13||Nvidia Corp.||NASDAQ: NVDA||$1,217||Information Technology|
|14||Take-Two Interactive Software Inc.||NASDAQ: TTWO||$1,214||Information Technology|
|15||Ross Stores Inc.||NASDAQ: ROST||$1,181||Consumer Discretionary|
|16||Fortinet Inc.||NASDAQ: FTNT||$1,179||Information Technology|
|17||Mastercard Inc. Class A||NYSE: MA||$1,178||Information Technology|
|18||Charter Communications Inc. Class A||NASDAQ: CHTR||$1,177||Communication Services|
|19||O'Reilly Automotive Inc.||NASDAQ: ORLY||$1,160||Consumer Discretionary|
|20||Cintas Corp.||NASDAQ: CTAS||$1,153||Industrials|
Note: The final value of a $100 investment is based on the total return, with reinvested dividends, from December 31, 2009 – December 5, 2019.
In comparison, $100 in the S&P 500 index overall would have amounted to $344 over the same time period. Let’s take a closer look at these strong performers.
Streaming giant Netflix takes the #1 spot. The company earned a staggering 3,767% return over the last ten years, meaning an initial $100 investment would now be worth almost $4,000. However, it remains to be seen whether Netflix’s first mover advantage will remain strong with new competitors entering the space.
One such rival, Amazon, takes its spot at #10 in the best-performing stocks of the decade. From its humble roots as an online bookseller, the company has transformed into an ecommerce leader. CEO Jeff Bezos credits Amazon’s admirable success to three key customer-centric factors: listen, invent, and personalize.
At #12 on the list, Constellation Brands—owner of several alcohol brands such as Corona—is also no stranger to invention. The company is protecting itself against cannabidiol (CBD) disruption with a $5 billion dollar investment in Canopy Growth, and future plans to create its own CBD-infused beverages.
Other well-known names on the top 20 list include discount department store chain Ross Stores (#15) and the credit card company Mastercard (#17), with the latter benefiting from an oligopoly in the industry.
Flying Under the Radar
Apart from the names you’d expect to see, there are also some lesser-known companies that made the list.
Well established among institutional investors and broker-dealers, MarketAxess Holdings takes the #2 spot. The fintech company operates a global electronic bond trading platform, vastly improving the process for investors who traditionally traded bonds “over-the-counter”.
In third place, healthcare technology company Abiomed develops medical devices that provide circulatory support. The company’s Impella® device—the world’s smallest heart pump— has been used to treat over 50,000 U.S. patients.
Fourth place company Transdigm Group gains its stronghold by developing specialized products for the aerospace industry. It has a strong acquisition strategy as well, having acquired over 60 businesses since its formation in 1993.
A Sector View
If we organize the top 20 by sector, information technology stocks appear in the list most frequently with five companies, followed by consumer discretionary (4 companies), and industrials and healthcare (3 companies each).
Sectors with less representation in the top 20 are communication services (2 companies), as well as consumer staples, financials, and real estate (1 company each).
The Bottom Line
While these stocks have performed extremely well over the last decade, they are not necessarily the best portfolio additions today. Some companies may have become overvalued, or be facing new competition in their industry—as is the case with Netflix. It’s best to consider all current information when building a portfolio.
However, the top 20 stocks do demonstrate the power of a buy-and-hold strategy. If you’re lucky enough to identify a winner early on, it’s possible to simply sit back and let your dollars grow.
The Dominance of U.S. Companies in Global Markets
U.S.-based companies have a heavy weighting in global equity markets. In most industries, their market capitalization exceeds 50% of the total.
U.S. Companies Dominate Global Markets
Are global indexes as “global” as you think they are?
With the aim of tracking market performance around the world, these indexes incorporate securities from various regions. However, while the number of securities may be relatively well diversified across countries, a dollar perspective tells a different story. When market capitalization is taken into account, country weightings may become much more unbalanced.
Today’s visualization is based on a concept by S&P Dow Jones Indices that shows the percentage of U.S.-based companies in global sectors and industries as of December 31, 2019. The calculations reflect the market capitalization of companies in the S&P Global Broad Market Index (BMI), an index that tracks over 11,000 stocks across 50 developed and emerging economies.
Percentage of U.S. Companies by Sector
U.S-based companies—those that maintain their primary business affairs in the U.S.—are a major component of many global sectors and industries.
Here’s how it breaks down:
|Sector||% of U.S.-based Companies||Most U.S.-heavy Subsector|
|Information technology||73%||Software (86%)|
|Health care||65%||Health care providers (82%)|
|Utilities||53%||Electric utilities (57%)|
|Real estate||51%||Equity REITs (69%)|
|Consumer discretionary||49%||Specialty retail (73%)|
|Consumer staples||46%||Household products (74%)|
|Industrials||46%||Aerospace & defense (73%)|
|Energy||44%||Energy - other (73%)|
|Financials||44%||Financials - other (73%)|
U.S.-based companies make up a staggering 73% of the information technology (IT) sector. However, China may soon threaten this dominance. The Made in China 2025 plan highlights new-generation IT as a priority sector for the country.
The U.S. is still the world’s leader, but China is coming up very fast.
—Rebecca Fannin, Journalist & Author of Tech Titans of China
Healthcare is also heavily skewed towards U.S-based stocks, which make up 65% of the sector’s market capitalization. This weighting is perhaps not surprising given the success of many U.S. healthcare companies. In Fortune’s list of the 500 most profitable U.S. companies, 41 healthcare organizations made the cut.
The materials sector has the smallest weighting of U.S.-based stocks, but they still account for almost one-third of the overall market capitalization. Three American companies are in the sector’s top 10 holdings: Air Products & Chemicals, Ecolab, and Sherwin-Williams.
U.S. Equity Views in a Global Context
Given the high weighting of U.S. stocks in global sectors and industries, having a U.S. view is important. This refers to investors gaining a clear perspective on the risks and opportunities that exist in the country. Investors can consider the trends influencing American companies in order to help explain stock performance.
U.S. stock dominance also impacts geographic diversification. While it helps non-U.S. investors overcome their home bias, American investors may want to consider targeting specific international markets for well-rounded exposure.
Intangible Assets: A Hidden but Crucial Driver of Company Value
Intangible assets – such as goodwill and intellectual property – have rapidly risen in importance compared to tangible assets like cash.
Intangible Assets Take Center Stage
View the high resolution version of this infographic by clicking here
In 2018, intangible assets for S&P 500 companies hit a record value of $21 trillion. These assets, which are not physical in nature and include things like intellectual property, have rapidly risen in importance compared to tangible assets like cash.
Today’s infographic from Raconteur highlights the growth of intangible asset valuations, and how senior decision-makers view intangibles when making investment decisions.
Tracking the Growth of Intangibles
Intangibles used to play a much smaller role than they do now, with physical assets comprising the majority of value for most enterprise companies. However, an increasingly competitive and digital economy has placed the focus on things like intellectual property, as companies race to out-innovate one another.
To measure this historical shift, Aon and the Ponemon Institute analyzed the value of intangible and tangible assets over nearly four and a half decades on the S&P 500. Here’s how they stack up:
In just 43 years, intangibles have evolved from a supporting asset into a major consideration for investors – today, they make up 84% of all enterprise value on the S&P 500, a massive increase from just 17% in 1975.
The Largest Companies by Intangible Value
Digital-centric sectors, such as internet & software and technology & IT, are heavily reliant on intangible assets.
Brand Finance, which produces an annual ranking of companies based on intangible value, has companies in these sectors taking the top five spots on the 2019 edition of their report.
|Rank||Company||Sector||Total Intangible Value||Share of Enterprise Value|
|1||Microsoft||Internet & Software||$904B||90%|
|2||Amazon||Internet & Software||$839B||93%|
|3||Apple||Technology & IT||$675B||77%|
|4||Alphabet||Internet & Software||$521B||65%|
|5||Internet & Software||$409B||79%|
|7||Tencent||Internet & Software||$365B||88%|
|8||Johnson & Johnson||Pharma||$361B||101%|
|10||Alibaba||Internet & Software||$344B||86%|
|12||Procter & Gamble||Cosmetics & Personal Care||$305B||101%|
Note: Percentages may exceed 100% due to rounding.
Microsoft overtook Amazon for the top spot in the ranking for 2019, with $904B in intangible assets. The company has the largest commercial cloud business in the world.
Pharma and healthcare companies are also prominent on the list, comprising four of the top 20. Their intangible value is largely driven by patents, as well as mergers and acquisitions. Johnson & Johnson, for example, reported $32B in patents and trademarks in their latest annual report.
A Lack of Disclosure
It’s important to note that Brand Finance’s ranking is based on both disclosed intangibles—those that are reported on a company’s balance sheet—and undisclosed intangibles. In the ranking, undisclosed intangibles were calculated as the difference between a company’s market value and book value.
The majority of intangibles are not reported on balance sheets because accounting standards do not recognize them until a transaction has occurred to support their value. While many accounting managers see this as a prudent measure to stop unsubstantiated asset values, it means that many highly valuable intangibles never appear in financial reporting. In fact, 34% of the total worth of the world’s publicly traded companies is made up of undisclosed value.
“It is time for CEOs, CFOs, and CMOs to start a long overdue reporting revolution.”
—David Haigh, CEO of Brand Finance
Brand Finance believes that companies should regularly value each intangible asset, including the key assumptions management made when deriving their value. This information would be extremely useful for managers, investors, and other stakeholders.
A Key Consideration
Investment professionals certainly agree on the importance of intangibles. In a survey of institutional investors by Columbia Threadneedle, it was found that 95% agreed that intangible assets contain crucial information about the future strength of a company’s business model.
Moreover, 98% agree that more transparency would be beneficial to their assessment of intangible assets. In the absence of robust reporting, Columbia Threadneedle believes active managers are well equipped to understand intangible asset values due to their access to management, relationships with key opinion leaders, and deep industry expertise.
By undertaking rigorous analysis, managers may uncover hidden competitive advantages—and generate higher potential returns in the process.
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