Markets
The 20 Best-Performing Stocks of the Decade
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.
The Shortlist
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.
Household Names
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.
Markets
Beyond Big Names: The Case for Small- and Mid-Cap Stocks
Small- and mid-cap stocks have historically outperformed large caps. What are the opportunities and risks to consider?
Beyond Big Names: The Case for Small- and Mid-Cap Stocks
Over the last 35 years, small- and mid-cap stocks have outperformed large caps, making them an attractive choice for investors.
According to data from Yahoo Finance, from February 1989 to February 2024, large-cap stocks returned +1,664% versus +2,062% for small caps and +3,176% for mid caps.
This graphic, sponsored by New York Life Investments, explores their return potential along with the risks to consider.
Higher Historical Returns
If you made a $100 investment in baskets of small-, mid-, and large-cap stocks in February 1989, what would each grouping be worth today?
Small Caps | Mid Caps | Large Caps | |
---|---|---|---|
Starting value (February 1989) | $100 | $100 | $100 |
Ending value (February 2024) | $2,162 | $3,276 | $1,764 |
Source: Yahoo Finance (2024). Small caps, mid caps, and large caps are represented by the S&P 600, S&P 400, and S&P 500 respectively.
Mid caps delivered the strongest performance since 1989, generating 86% more than large caps.
This superior historical track record is likely the result of the unique position mid-cap companies find themselves in. Mid-cap firms have generally successfully navigated early stage growth and are typically well-funded relative to small caps. And yet they are more dynamic and nimble than large-cap companies, allowing them to respond quicker to the market cycle.
Small caps also outperformed over this timeframe. They earned 23% more than large caps.
Higher Volatility
However, higher historical returns of small- and mid-cap stocks came with increased risk. They both endured greater volatility than large caps.
Small Caps | Mid Caps | Large Caps | |
---|---|---|---|
Total Volatility | 18.9% | 17.4% | 14.8% |
Source: Yahoo Finance (2024). Small caps, mid caps, and large caps are represented by the S&P 600, S&P 400, and S&P 500 respectively.
Small-cap companies are typically earlier in their life cycle and tend to have thinner financial cushions to withstand periods of loss relative to large caps. As a result, they are usually the most volatile group followed by mid caps. Large-cap companies, as more mature and established players, exhibit the most stability in their stock prices.
Investing in small caps and mid caps requires a higher risk tolerance to withstand their price swings. For investors with longer time horizons who are capable of enduring higher risk, current market pricing strengthens the case for stocks of smaller companies.
Attractive Valuations
Large-cap stocks have historically high valuations, with their forward price-to-earnings ratio (P/E ratio) trading above their 10-year average, according to analysis conducted by FactSet.
Conversely, the forward P/E ratios of small- and mid-cap stocks seem to be presenting a compelling entry point.
Small Caps/Large Caps | Mid Caps/Large Caps | |
---|---|---|
Relative Forward P/E Ratios | 0.71 | 0.75 |
Discount | 29% | 25% |
Source: Yardeni Research (2024). Small caps, mid caps, and large caps are represented by the S&P 600, S&P 400, and S&P 500 respectively.
Looking at both groups’ relative forward P/E ratios (small-cap P/E ratio divided by large-cap P/E ratio, and mid-cap P/E ratio divided by large-cap P/E ratio), small and mid caps are trading at their steepest discounts versus large caps since the early 2000s.
Discovering Small- and Mid-Cap Stocks
Growth-oriented investors looking to add equity exposure could consider incorporating small and mid caps into their portfolios.
With superior historical returns and relatively attractive valuations, small- and mid-cap stocks present a compelling opportunity for investors capable of tolerating greater volatility.
Explore more insights from New York Life Investments
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