best performing stocks of the decade

U.S. stocks have had what can only be called an excellent decade. MarketWatch, a Dow Jones site, will feature a number of forward-looking articles building on the past decade’s action. Today we’re taking a look back.

The Dow Jones Industrial Average (DJIA) returned 165% (with dividends reinvested) and the S&P 500 Index (SPX) returned 244% from the end of 2009 through Dec. 5, 2019. We’re not quite at the end of 2019, but if we were, and those figures held, the compounded annual growth rate for the Dow would be 10.2%. For the S&P 500, it would be 13.2%.

That average return for the S&P 500 measures up well when compared with the 10% average for the almost 100-year period of June 30, 1927, through Sept. 30, 2019, the longest period available using custom research.

For the past decade, we reviewed the entire S&P 500, as it is currently constituted, to see which stocks performed best. Among the 500 companies, 46 have traded in their present form for less than 10 years, so they are excluded.

Here’s a list of companies whose stocks performed the best, with reinvested dividends, from the end of 2009 through Dec. 5:

COMPANY                   TICKER   INDUSTRY CATEGORY        RETURN 
Netflix Inc.              US:NFLX  Cable/Satellite TV       3,767%  3
MarketAxess Holdings      US:MKTX  Investment Banks/Brokers 3,182%  2
Abiomed Inc.              US:ABMD  Medical Specialties      2,121%  3
TransDigm Group Inc.      US:TDG   Aerospace & Defense      2,065%  0
Broadcom Inc.             US:AVGO  Semiconductors           1,919%  1
Align Technology Inc.     US:ALGN  Medical Specialties      1,458%  1
United Rentals Inc.       US:URI   Finance/Rental/Leasing   1,434%  1
Regeneron Pharmaceuticals US:REGN  Biotechnology            1,430%  2
Ulta Beauty Inc.          US:ULTA  Specialty Stores         1,233%  1
Amazon.com Inc.           US:AMZN  Internet Retail          1,209%  1
Extra Space Storage Inc.  US:EXR   Real Estate Inv Trust    1,166%  1
Constellation Brands Inc. US:STZ   Beverages: Alcoholic     1,124%  0
Nvidia Corp.              US:NVDA  Semiconductors           1,117%  2
Take-Two Interactive      US:TTWO  Recreational Products    1,114%  1
Ross Stores Inc.          US:ROST  Apparel/Footwear Retail  1,081%  0
Fortinet Inc.             US:FTNT  Computer Communications  1,079%  1
Mastercard Inc. Class A   US:MA    Finance/Rental/Leasing   1,078%  1
Charter Communications    US:CHTR  Cable/Satellite TV       1,077%  0
O'Reilly Automotive Inc.  US:ORLY  Specialty Stores         1,060%  1
Cintas Corp.              US:CTAS  Other Consumer Services  1,053%  0

The right-most column shows the number of times each stock was among the top 10 performers over the past 10 individual years (including 2019 through Dec. 5).

Netflix (ticker: NFLX) is far ahead of the pack, with a spectacular 3,767% return. That translates to a compounded annual growth rate (CAGR) of 44.1%. Amazon (AMZN) ranks 10th, and its 1,209% return translates to a CAGR of 29.3%. Apple (AAPL) ranks 28th, with a total return of 899% and a CAGR of 25.9%.

It’s interesting that some of the best performers for 10 years weren’t among the top 10 during any individual year. TransDigm (TDG), for example, ranks fourth, with a 2,067% return (CAGR of 36%). The company has a very important advantage in the aerospace industry—a high barrier for entry in the market for specialized replacement parts for aircraft. In April, Will Muggia of Westfield Capital Management called TransDigm “the best managed company in America.”