Using data from 1997-2006, with a few exceptions for newer companies, I looked at which companies were some of the best investments of all-time.
Then, I looked for patterns between these companies to see what might help you find stocks like these in the future.
Disclosure: I am not a certified investment advisor and you should consult one before making any kind of investments based on this post.
First, here are some of the top stock investments of all-time based on growth and annualized returns (in no particular order):
Berkshire Hathaway is a multinational conglomerate holding company that you probably know of because it was co-founded by Warren Buffett who is regarded by many as the greatest investor of all-time.
Annualized returns: 19.84%, no dividends
Altria is known for tobacco products like cigarettes, cigars, and smokeless tobacco. They also own a major wine producer: St. Michelle Wine Estates.
Annualized returns: 17.7%
3.8% dividend yield in 2019.
Apple is an American multinational technology company that designs, develops, and sells consumer electronics, computer software, and online services.
Annualized return: 16.3%,
1.4% dividend yield in 2019.
Microsoft is an American multinational technology company that develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services.
Annualized returns: 25.0%
1.9% dividend yield in 2019.
Alphabet is an American multinational conglomerate known for being the parent company of Google, YouTube, etc.
Annualized returns: 24.9%
Amazon is a technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence.
Annualized return: 37.4%
Tesla is an American electric vehicle and clean energy company with products that include electric cars, battery energy storage from home to grid scale, solar panels and solar roof tiles, etc.
IPO on Jan. 29th 2010: $17/share
March 2021: over $700/share
That's a 4,117% stock price increase over that span.
Coca-Cola is a beverage corporation that is most known for its sodas, but also has water, juice and other products.
Annualized returns: 13.1%
3.2% dividend yield 2019.
ExxonMobil is an American multinational oil and gas corporation.
Annualized returns: 11.9%
3.5% dividend yield 2019.
General Electric (GE) is an American multinational conglomerate that deals with aviation, healthcare, power, renewable energy, digital industry, additive manufacturing and venture capital and finance.
Annualized returns: 10.7%
2.5% dividends 2019.
IBM is an American multinational technology and consulting company that specializes in computer hardware and software for businesses.
Annualized returns: 13.8%
3.7% dividend yield 2019.
Johnson & Johnson
Johnson & Johnson is an American multinational corporation that develops medical devices, pharmaceutical, and consumer packaged goods.
Annualized return: 15.5%
2.3% dividend yield 2019.
Netflix is an American over-the-top content platform and production company.
IPO $7 in 2010 – $516 in 2020.
That's a 7,371% increase in share price.
Chevron is an American multinational energy corporation engaged in every aspect of oil, natural gas, etc.
Annualized return: 11.0%
3.2% dividend yield 2019.
Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores.
Annualized returns: 18.4%
2% dividend yield 2019.
What they have in common:
1. Highly-rated by employees
One thing that jumped out at me when I looked at these companies is that they tend to be really highly-rated places to work.
You can find that out by looking at their employee reviews on sites like Glassdoor and Indeed.
Most of these companies have around a 4 out of 5 star rating, while an average company usually has around 3 stars.
What's also nice about this is you can usually find quite a few of these reviews before a company goes public, so it might give you an idea of whether the company has good leadership or not.
2. Can serve 1+ billion people
“The world's biggest problems are the world's biggest business opportunities. I teach this to my students. You want to be a billionaire? Find a billion-person problem that you can make a dent in.”Peter Diamandis
Another thing I noticed about these companies is that they typically solve a problem for or just improve the lives of a billion people.
You have two global energy companies like Chevron and ExxonMobil that help people commute in their vehicles every day.
There are a bunch of tech companies on this list like Microsoft, Apple, IBM, and Google that provide products and services that help with productivity, entertainment, and more for countless people.
You have the two biggest retail giants in Walmart and Amazon that help billions of people get the products they need quickly and at a fair price.
And there are companies like Coca-Cola, Johnson & Johnson, and Altria that have provided products that countless people use on a daily basis like drinks, tobacco products, wine, toiletries, etc.
3. Products/Services that can be used daily and conveniently
Just look at how convenient a lot of these companies' products and services are:
- Amazon makes buying online and getting stuff shipped easier.
- Walmart is an all-in-one store with locations EVERYWHERE.
- Netflix made it where you didn't have to go to video stores like Blockbuster anymore.
- Alphabet made it easier to find information and entertainment online with Google and YouTube.
- Apple helped pave the way to combining technologies in a convenient way with the iPhone.
Now let's look at some examples of how these companies have people using their products/services daily:
- Netflix can be easily accessed on any device and content can be watched daily.
- Google is used daily for searching, productivity, entertainment, etc.
- Johnson & Johnson provides products that people use daily for grooming, toiletries, beauty, health, etc.
- If you go to Walmart, you can get all the things you use daily like clothes, groceries, meds, electronics, etc.
4. You and your friends/family probably use a combination of these companies all the time
Just think about all the products and services you love using.
Now think about the products and services that your family and friends rave about.
You can probably find a bunch of them are provided by the companies above.
There may be future investment opportunities that you can find based on what you and the people closest to you love using the most.
5. They disrupted an industry
Another thing I've noticed with these companies is that they disrupted an industry.
Here are some examples:
- Apple changed mobile phones by combining them with computers to create the smartphone. They also combined the music player, camera, GPS, and other devices all into the same device.
- Netflix disrupted the home movie and TV experience by making things streamable. This is what killed Blockbuster.
- Walmart disrupted the retail industry by making everything available in one place, so you wouldn't have to go to countless stores for different things.
- Amazon disrupted book stores and then all of online shopping by making everything easy to find and buy while having it arrive in just 2 days or less.
- Microsoft capitalized on the internet boom and became one of the leading developers of software, PCs, gaming consoles, etc.
We can learn a lot from history.
By going back and looking at some of the best performing stocks of all-time and finding patterns, you can give yourself a better chance of making good investments in the future.
Hopefully this post gave you some good ideas and helped you look at investments a little differently.