Many valuable investment lessons can be learned by researching the best-performing stocks of all time. After all, stocks that have generated some of the highest returns in history necessarily have a long track record of generating great returns, are the most profitable players in their industries, and are often far more successful than even the best-known of S&P 500 companies. By definition, a best-performing stock of all time doesn't just generate the highest returns for a year or two; it has a successful, market-beating history spanning decades.
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While it's impossible to get a true list of the best-performing stocks of all time, and though many successful companies are bought out, split up, or merge with other, less successful companies, that does not mean there are not lessons to be learned. So, without further ado, here are 10 of the top-performing stocks of all time.
Source:S&P Global Market Intelligence. * Standard Oil was founded in 1870, but was broken up in 1911 by the Federal Government for violating Anti-Trust laws. ExxonMobil is the largest of the many companies that John D. Rockefeller's Standard Oil was split up into. ** Does not include dividends. Start date of January 1, 1970. ***Company acquired and then listed as an IPO in 1919. Dividends were paid to previous owners of the private Coca-Cola since 1893.
Before we dive into the companies listed above, here are a few points about the methodology in compiling this list.
1. Where's Microsoft and Apple?As one might notice, top-performing stocks such as Microsoft (up over 66,000% since its IPO on March 13, 1986) are not included. This is nothing against Microsoft. There are many amazing companies that have produced fabulous wealth for their owners over the years. And therein lies the problem. When attempting to identify the best-performing stocks of all time, a myriad of issues immediately become apparent. None of the potential candidates have the same "start date," i.e. foundation date or IPO date. What about the companies that were fantastic stocks to own for decades upon decades, only to be taken private (think Procter & Gamble'sGillette)? Case in point: had you invested in Coca-Cola on its IPO date (not even its incorporation date) at $40 per share, and reinvested all dividends, you would have had $9.8 million by 2012. This staggering return amounts to a total percentage return of approximately 24,500,000%.
There are scores of amazing stocks that are worthy of consideration, but in this list we opted for a mix of age and a long history of paying dividends. This blending of criteria, we felt, would at least make for a decent attempt at identifying the best-performing stocks of all time. After all, the original Standard Oil, the company of which ExxonMobil was once a mere component, was divided into just 1,000 shares at its founding. Owning just one of those shares since that day it was founded in Cleveland, OH in 1870 would make one's descendants unimaginably wealthy today.
Source: Getty Images.
2. A true race requires a common starting line.We chose the starting date of Jan. 1, 1970 as that's more or less when reliable stock market data that's readily available to the public begins. It's no coincidence that high-quality, accurate price data became available the very same year that the National Association of Securities Dealers (better known as NASDAQ) was founded. The actual returns experienced by investors in the enterprises listed above, particularly since their inception, likely leave top-performing stocks of the last few decades (such as Microsoft) in the dust.
With these things in mind, here's a brief description of our ten top performing stocks of all time.
E. I. du Pont de Nemours and Company
Commonly known as DuPont, E.l. du Pont de Nemours had its beginning in a revolution -- not the American Revolution but the French Revolution after its founder, E.l. du Pont, fled France for the U.S. After establishing itself as a gunpowder manufacturer, the company continued to research and innovate, eventually creating scores of industrial and consumer products, including Kevlar and nylon. Today, the company sports a market capitalization of $70 billion, even after spinning off divisions such asThe Chemours,and reported net income of $2.513 billion in 2016.
Make no mistake -- there's nothing general about General Mills. The company, founded just before the Civil War, was originally named the Minneapolis Milling Company, becoming General Mills when the company merged with more than two dozen other flour mills in 1928. Today, this best-performing stock's products can be found in just about every home, with such brands in its portfolio as Betty Crocker, Pillsbury, Hagen-Dazs, and best-selling Cheerios. It's little wonder this company merits a market capitalization of $35 billion, well over a century after its humble beginning as a simple flour mill.
Stanley Black & Decker
Formed by the merger of the Stanley Works and Black & Decker, what is today known as Stanley Black & Decker sports a market capitalization of $30 billion and has a portfolio of such well-known products as the Black & Decker brand of tools, commercial security solutions, and a host of other offerings.
Formed by the merger of Exxon (formerly the Standard Oil Co. of New Jersey) and Mobil Oil (once known as Standard Oil Co. of New York), ExxonMobil is the largest piece of what was once the monopolistic Standard Oil Co. Given that it's a mere part of one of the most successful corporations in history, a history thatgave birth to arguablyone of the world's largest private fortunes, we would be remiss to pass over one of John D. Rockefeller's "Baby Standards."
Though not a household name, Consolidated Edison has been rewarding shareholders as a best-performing stock of all time since long before many of our grandparents were born. Formed in 1823 as the New York Gas Light Company, Con Ed is one of the largest for-profit publicly held utility companies in the United States. This utility formed in the beginning days of the electric light generated $13 billion in revenue in 2016, paid out $763 million in dividends, and commands a market capitalization of $23 billion.
You may never have heard of UGI Corp., but its long-term shareholders almost certainly know the name extremely well. This Pennsylvania-based utility has been showering returns on its shareholders for decades, having initiated its dividend in 1885. Last year it paid out $160 million to shareholders and today it garners a market capitalization of $8.3 billion.
Procter & Gamble
Any list of top-performing stocks of all time has to include consumer-products juggernaut Procter & Gamble. Today, the company owns not just a few but 21 consumer-product and personal-care brands that eachgenerate over $1 billion per year in annual sales. These products include Bounty paper towels, Oral-B toothpaste, Tide laundry detergent, and scores of others. With a market capitalization of over $233 billion, and with humble beginnings stretching back to the first half of the 19th century, you can be assured that Procter & Gamble is a top-performing stock of all time.
As previously noted, Coca-Cola has been a fantastic stock to own basically since the day it held the IPO of its current incarnation in 1919. The IPO took place after the previous owners sold the private corporation for $25 million and, seeking to raise growth capital, the new owners offered shares to the public at $40. Had the dividends on a single share been reinvested, today, that single share would be worth over $9.8 million. It's little wonder, then, that Coca-Cola is a favorite stock of Warren Buffett's, a lover of tried-and-true consumer brands with rich histories.
Odds are good that you or someone extremely close to you has a Colgate Palmolive product at home. Founded in 1806, today the company is a cleaning and oral-hygiene juggernaut, generating over $15 billion in sales and $2.4 billion in profits in 2016. It's hard to imagine the founder, William Colgate, dreaming that the company he founded, and later merged with Palmolive soaps, would one day be worth $65 billion.
PPG Industries may not, itself, be a household name. But odds are extremely good that you have benefited from its broad array of coating products and paints, which not only are found in the home but are used in innumerable industrial applications as well. Originally founded as the Pittsburgh Plate Glass Company in 1883, the company today boasts a market capitalization of some $25 billion and generated revenues of $14.7 billion in 2016.
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