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2016 has been a solid year for the stock market, with the S&P 500 (SNPINDEX: ^GSPC) having posted a total return of between 5% and 6% so far. Lurking beneath what seems to be fairly pedestrian gains for the major indexes, however, are a number of stocks that have made big contributions to the success of the overall market. In particular, investors can point to just a small handful of S&P 500 components that have managed to produce impressive returns of 50% or more, and many of them have some common traits that explain their success. Today, we'll look at this baker's dozen of the biggest stock gainers so far this year.
Data source: S&P Global Market Intelligence.
Some common themes
The first thing that is patently obvious from the list above is that the rebound in the energy sector is responsible for many of the best-performing stocks of 2016 so far. More than half of the stocks in the list have some connection to the energy industry, and even though they take different approaches to the business, they've all shared in some part in the more optimistic outlook for energy than what prevailed in the gloomy days toward the end of 2015.
In some cases, merger and acquisition activity has helped stoke higher returns. For Spectra Energy, an agreement to merge with pipeline peer Enbridge (NYSE: ENB) will help create a huge giant in the midstream energy industry, combining pipeline, transportation, and storage assets that will make the combined entity more competitive with giants in the field. To an extent, that has also driven interest in ONEOK and other companies with transmission businesses, as consolidation could help to improving pricing across the industry.
The rise of Newmont Mining also points to some of the positives that have occurred elsewhere in the commodities market. Continued low interest rates have helped keep the gold market strong, and Newmont has been just one of many mining stocks to reap the rewards. More recently, fears about an eventual Fed tightening have eaten into gold's gains, but Newmont still has some advantages over its smaller peers that make it a compelling idea for precious metals investors.
Rising retail and a new tech boom
Several other companies among the best performers in the S&P also share comeback stories. Both Urban Outfitters and PVH have bounced back from terrible performance during the 2015 holiday season, and investors now have high hopes that this year's high season for shopping could bring even more impressive success to the two companies. Retail remains extremely competitive, but the best companies have found ways to adapt to changing conditions while remaining true to their core brand identity. Whether it's PVH's upscale Calvin Klein and Tommy Hilfiger brands or the irreverent approach that Urban Outfitters takes to fashion, investors have benefited from each company's internal efforts to be more efficient and effective.
Finally, technology stocks have played a role in the success of the S&P, but the two companies on this list are there for much different reasons. NVIDIA can point to the success of its high-speed graphics products and their adoption among gamers as a primary cause for its having more than doubled this year. Its ability to hold competitors at bay has thus far been unchallenged, although some fear that the stock has climbed so quickly that it leaves new investors open to the potential for setbacks if NVIDIA's rivals find ways to fight back.
For Symantec, on the other hand, the big boost for shareholders came in the form of a $4-per-share special dividend early in the year. Tech stocks aren't well known for their dividends, but Symantec made its decision based on the sale of its Veritas data-storage business, combining stock repurchases with the special one-time payout as a shareholder-friendly gesture. With so much potential in the cybersecurity arena, Symantec has plenty of growth potential left for the future.
Be smart about your stocks
Investors shouldn't expect these top S&P stocks to keep rising at the same pace that has created their year-to-date gains. However, most of them are in the middle of favorable trends that could continue, and if they do, then further share-price increases are likely for old and new investors alike.
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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends NVIDIA, ONEOK, and Spectra Energy. The Motley Fool recommends Urban Outfitters. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.