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As 2020 Draws Closer, Here're the Best Stocks of the Past Decade

Tirthankar Chakraborty

As 2019 is drawing to a close, it’s time to take a look at the best-performing stocks of the past decade, and not just end-of-the-year winners.

The Dow and the S&P 500, in particular, have returned 165% and 244% since the end of 2009. Compounded annually, these figures would be 10.2% for the Dow and 13.2% for the S&P 500 at the end of 2019. Thus, the average growth for the S&P 500 in the last decade is much better compared with the 10% average of the past 100 years.

Having said that, the entire decade hasn’t been smooth, especially the year 2018. Investors were expecting the stock market to crumble on worries about an imminent recession. But fortunately, that isn’t the case. The U.S. economy is growing at a steady pace, with third-quarter GDP of this year expanding 2.1% and November jobs data remaining healthy. After all, hourly wages continued to increase at a faster rate, indicating a growing economy and the lowest unemployment level in 50 years.

Nonetheless, among individual stocks, Netflix, Inc. NFLX has gained the most in the past decade with a whopping return of 3,767%, which translates into a CAGR of 44.1%. Netflix’s partnership with Telefonica, KDDI, AT&T, Comcast, DISH, Verizon, Charter, Altice, T-Mobile and Sky is certainly doing good for its streaming platform. The company’s subscriber base has been boosted by its content strength and focus on originals across various genres.

Other major behemoths, including Amazon.com, Inc. AMZN and Apple Inc. AAPL, have also been among the top performers. Amazon saw its shares gain a spectacular 1,209%, while Apple’s shares climbed 899%.

Amazon, particularly, has gained from solid Prime momentum owing to robust grocery services and strong content portfolio. Strengthening its AWS services, improving Alexa skills and expanding smart home products are some of the other major tailwinds. And when it comes to Apple, the company has benefitted from its services segment and improved iPhone sales, owing to the trade-in programs.

Favorite Stocks of the Past Decade

We have thus picked stocks that have not only been among the best performers of the past decade but also flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy) now.

NVIDIA Corporation NVDA operates as a visual computing company worldwide. It operates through two segments, GPU and Tegra Processor. The current limited trade agreement between Washington and Beijing bodes well for NVIDIA, as the Zacks Rank #2 company has significant exposure in China.

Over the past decade, NVIDIA has surged 1,231.7%, higher than the Semiconductor - General industry’s rise of 292.1%. What’s more, NVIDIA is projected to see earnings growth of 29.7% next year, compared with the industry’s expected rise of 13.1%.

 

Over the past two months, the company have seen eight earnings estimates move higher, compared with two lower, at least when looking at the next-year time frame. The Zacks Consensus Estimate for its next-year earnings has moved up 1.7% over the past 60 days.

Fortinet, Inc. FTNT provides broad, integrated and automated cybersecurity solutions worldwide. It offers FortiGate hardware and software licenses that provide various security and networking functions. The Zacks Rank #1 company is benefiting from solid growth in Fortinet Security Fabric, cloud and SD-WAN offerings. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 10-year period, Fortinet has gained 1,101.8%, higher than the Security industry’s rise of 348.1%. Fortinet is expected to see earnings growth of 12.5% next year versus the S&P 500’s expected growth of 5.5%.

 

Over the past two months, the company have seen 11 earnings estimates move higher, compared with none lower, at least when looking at the next-year time frame. The Zacks Consensus Estimate for its next-year earnings has climbed 13.9% over the past 60 days.

Charter Communications, Inc. CHTR provides cable services to residential and commercial customers in the United States. The Zacks Rank #2 company is benefiting from growth in Internet, mobile, commercial and video revenues. Increase in Internet speed at no extra cost is also aiding subscriber growth.

Over the past decade, Charter Communications has surged 1,145.7%, higher than the Cable Television industry’s rise of 328.9%. What’s more, Charter Communications is projected to see earnings growth of 97.5% next year versus the industry’s estimated rise of 18.9%.

 

Over the past two months, the company have seen 12 earnings estimates move north, compared with one lower, at least when looking at the next-year time frame. The Zacks Consensus Estimate for its next-year earnings has risen 8.7% over the past 60 days.

O'Reilly Automotive, Inc. ORLY engages in the retail of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States. A customer-centric business model and growing demand for high-quality auto parts are currently working in favor of O’Reilly.

In the past 10-year period, O'Reilly has jumped 1,075.3%, compared with the Automotive - Retail and Wholesale - Parts industry’s rise of 475.9%. The Zacks Rank #2 company is also projected to see earnings growth of 11.6% next year versus the S&P 500’s expected growth of 5.5%.

 

Over the past two months, the company have seen 10 earnings estimates move higher, compared with none lower, at least when looking at the next-year time frame. The Zacks Consensus Estimate for its next-year earnings has moved up nearly 2% over the past 60 days.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2020?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.

Start Your Access to the New Zacks Top 10 Stocks >>


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Fortinet, Inc. (FTNT) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
O'Reilly Automotive, Inc. (ORLY) : Free Stock Analysis Report
 
Charter Communications, Inc. (CHTR) : Free Stock Analysis Report
 
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