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All Contents © 2017The Kiplinger Washington Editors
By Dan Burrows, Contributing Writer
| August 2017
A finance professor made a startling discovery about the stock market: Over a 90-year span, 96% of all stocks collectively performed no better than risk-free 1-month Treasury bills. After analyzing the lifetime returns of 25,782 common stocks, Hendrik Bessembinder determined that just 1,000 of those stocks – or about 4% of the total – generated all of the nearly $32 trillion in wealth created by the stock market between July 1926 and December 2015. Even more striking, a mere 30 stocks accounted for one-third of that amount.
But before we get to our profiles of the 30 best-performing stocks, most of which are (or were) components of the Dow Jones industrial average, a word of caution. Accurately identifying the precious few “home run” stocks amid the many thousands of underachieving names is extremely difficult. It might be impossible. Your portfolio is more likely to suffer because you guessed wrong and failed to invest in the top long-term winners, says Bessembinder of Arizona State University's W. P. Carey School of Business.
A better alternative to trying to find a needle in a haystack? To paraphrase Jack Bogle, the Vanguard founder and pioneer of index investing: Just buy the haystack. “The results reinforce the importance of diversification,” says Bessembinder, “and low-cost index funds are an excellent way to diversify broadly.”
Take a look at the 30 top-performing stocks since 1926.
Stocks are listed in order of the dollar amount of lifetime wealth creation, which includes reinvested dividends, from lowest to highest. Current stock data as of August 18, 2017. Analysts’ ratings provided by Zacks. For more details on Bessembinder’s study methodology and findings, download a copy of his paper, "Do Stocks Outperform Treasury Bills?"
Ticker symbol: PFE
Lifetime wealth creation: $171.6 billion
Lifetime cumulative return: 2,588,650%
Current share price: $32.67
Current dividend yield: 3.9%
Current analyst ratings: 7 strong buy, 0 buy, 7 hold, 0 sell, 1 strong sell
It should come as no surprise that many of the top-performing stocks since 1926 are components of the Dow, which dates back to 1896. The popular benchmark is made up of 30 of the bluest blue-chip stocks available to investors, and components change infrequently. Pfizer, founded in 1849 and public since 1942, had to wait until 2004 before it was finally added to the industrial average. The pharmaceutical giant earned the honor in large part thanks to its history of developing blockbuster drugs. Among the best known are Lipitor (for cholesterol) and Viagra (for erectile dysfunction). Pfizer also owes its growth to its many successful acquisitions. Since 2000, it has purchased Warner-Lambert, Pharmacia and Wyeth. Despite the stock’s remarkable lifetime performance, it hasn’t been as remarkable in recent years. Returns lag the broader Standard & Poor’s 500-stock index by 30 percentage points over the past decade. Over the last 52 weeks, the stock is down 6%.
Ticker symbol: MCD
Lifetime wealth creation: $172.2 billion
Lifetime cumulative return: 370,930%
Current share price: $157.76
Current dividend yield: 2.4%
Current analyst ratings: 17 strong buy, 1 buy, 6 hold, 0 sell, 0 strong sell
McDonald's needs no introduction. The world’s biggest burger chain has been a stock market and dietary staple for decades. That's partly because management has a knack for changing with the times. Shares performed poorly in the early 2000s, for example, around the time the low-carb Atkins diet surged in popularity. McDonald's responded by adding more healthy fare to its menu and the stock recovered. To this day, McDonald's continues to focus on healthier items to compete with new chains boasting fresher offerings, but it was the launch of all-day breakfast in 2015 that has given the Golden Arches its latest jolt of life. Over the last two years, shares are up 58%. History suggests it's never wise to count out McDonald’s, a public company since 1965 and a Dow component since 1985. Its dividend dates back to 1976 and has gone up every year since.
Ticker symbol: BMY
Lifetime wealth creation: $177.2 billion
Lifetime cumulative return: 3,484,840%
Current share price: $56.42
Current dividend yield: 2.8%
Current analyst ratings: 5 strong buy, 1 buy, 5 hold, 0 sell, 1 strong sell
Add another pharmaceutical maker to the list of the greatest creators of stock market wealth for investors over the 90-year span. The modern-day Bristol-Myers Squibb resulted from the 1989 merger of Bristol-Myers and Squibb, but even before joining forces the two separate companies boasted distinguished business lineages that stretch back into the 19th century. A long track record of successful acquisitions has kept the pipeline primed with big-name drugs over the years. Among the better-known names today are Coumadin, a blood thinner, and Glucophage, for Type 2 diabetes. Despite a phenomenal lifetime return for the stock through 2015, shares cratered a year ago after one of the company’s key cancer drugs failed a clinical study. Bristol-Myers Squibb stock has yet to recover, with the price down 5% over the last 52 weeks.
Windpower Engineering & Development
Ticker symbol: MMM
Lifetime wealth creation: $180.7 billion
Lifetime cumulative return: 749,260%
Current share price: $203.53
Current dividend yield: 2.3%
Current analyst ratings: 4 strong buy, 0 buy, 6 hold, 0 sell, 2 strong sell
Perhaps best known for Scotch tape and Post-It notes, it’s easy to forget that one of the three M’s in 3M stands for mining. (The other two M’s stand for Minnesota and manufacturing, as in Minnesota Mining and Manufacturing Co.) The company began in 1902 as a small-time outfit in search of corundum, an abrasive mineral used in manufacturing. The mining venture didn’t pan out, but the failure did force the company to innovate and branch out. It hasn’t stopped since. Today, 3M makes 60,000 products, with one-third of sales coming from products invented in the last five years. The company’s legacy of success earned it a spot in the Dow in 1976. Shareholders have happily gone along for the ride. 3M's dividend dates back a century and has increased annually for 58 consecutive years. Shares hit an all-time high in June.
Ticker symbol: ABT
Lifetime wealth creation: $189.6 billion
Lifetime cumulative return: 2,820,670%
Current share price: $48.74
Current dividend yield: 2.2%
Current analyst ratings: 11 strong buy, 2 buy, 5 hold, 0 sell, 0 strong sell
Joining Pfizer and Bristol-Myers Squibb on this distinguished list of top-performing stocks is fellow health-care giant Abbott Laboratories. The company has a long and eventful history that dates to its founding in 1888. Abbott first paid a dividend in 1924, and it has raised its payout annual for the last 46 years in a row. The company went public in 1929 on the eve of the Great Depression. Its many decades as a dividend-paying public company have certainly attributed to the extraordinary lifetime returns of its stock. A new era began for Abbott in 2013, when it spun off AbbVie as a standalone maker of branded drugs and therapies. Abbott now focuses on generic drugs, medical devices, nutrition and diagnostic products. Since the spinoff, however, Abbott’s stock has trailed the performance of both AbbVie and the broader S&P 500 index.
Ticker symbol: DIS
Lifetime wealth creation: $192.8 billion
Lifetime cumulative return: 811,520%
Current share price: $100.70
Current dividend yield: 1.6%
Current analyst ratings: 9 strong buy, 2 buy, 8 hold, 0 sell, 1 strong sell
Disney began as a cartoon studio in 1923, and Mickey Mouse appeared in his first starring role five years later. The company issued stock for the first time in 1940. In the decades since, Walt Disney expanded into live-action films, theme parks, toys and television. In the last 20 years alone Disney has gobbled up ABC, Pixar Animation Studios, Marvel Entertainment and Lucasfilm (of “Star Wars” fame). The stock has tripled in value over the last 10 years, but shares face increasing pressure as viewers cut the cable cord and turn to other forms of entertainment. Disney owns cable properties including ESPN and the Disney Channel. But Disney has survived the challenges of a changing media landscape throughout its history, so don’t be too quick to write off this longtime great stock.
Ticker symbol: N/A
Lifetime wealth creation: $202.6 billion
Lifetime cumulative return: 279,550%
Current share price: N/A
Current dividend yield: N/A
Current analyst ratings: N/A
For the purposes of Bessembinder’s study, returns for the original Mobil Corp. stopped in 1999, when Mobil merged with Exxon to form today’s energy powerhouse ExxonMobil. That fact makes the lifetime performance of Mobil stock (original ticker symbol “MOB”) all the more impressive considering it missed out on the current bull market, one of the longest in U.S. history. Even prior to the merger, Mobil was among the largest oil companies in the nation, tracing its lineage back to Standard Oil Company of New York. As for the wisdom of its deal with Exxon almost two decade ago, keep reading to learn where ExxonMobil lands among the 30 greatest stocks since 1926.
Ticker symbol: ORCL
Lifetime wealth creation: $203.7 billion
Lifetime cumulative return: 60,750%
Current share price: $48.62
Current analyst ratings: 17 strong buy, 2 buy, 8 hold, 0 sell, 0 strong sell
Oracle is one of several technology stocks to crack the top 30, a notable feat considering most Big Tech companies are relatively young compared to the rest of the names on this list. Founded in 1977 and publicly traded since 1986, Oracle got its start as a provider of database management software. As much as any high-tech company of the era, it rode the late-1990s tech bubble to lofty heights -- and then crashed. It’s been a long, slow recovery ever since, driven by a wide portfolio of software aimed at corporate customers. Where Oracle goes from here is less clear. Larry Ellison is still with the company after 40 years, though now in the role of chief technology officer. Management, led by co-CEOs Mark Hurd and Safra Catz, is in the midst of a major transformation, trying to reinvent the company and embrace the rush to cloud-based services.
Ticker symbol: BRK.B
Lifetime wealth creation: $209.8 billion
Lifetime cumulative return: 290,880%
Current share price: $177.56
Current analyst ratings: 2 strong buy, 0 buy, 1 hold, 0 sell, 0 strong sell
It should come as no surprise that the greatest value investor of all time would be behind one of the best stocks of all time. Warren Buffett took control of Berkshire Hathaway, a struggling textile manufacturer, in the early 1960s. As it quickly became clear that U.S. textile manufacturing was in decline, Buffett decided to shift gears. By the late 1960s Buffett had already diversified into banking, insurance and newspaper publishing. He never looked back. Berkshire is now a holding company comprised of dozens of diverse businesses selling everything from underwear (Fruit of the Loom) to insurance policies (Geico). Berkshire has also been a vehicle for Buffett to invest in stocks, which he has done shrewdly and successfully. At 86 years old, Buffett has given no indication when he will retire. Berkshire shareholders aren’t complaining.
Ticker symbol: PEP
Lifetime wealth creation: $213.9 billion
Lifetime cumulative return: 4,228,440%
Current share price: $117.60
Current dividend yield: 2.7%
Current analyst ratings: 8 strong buy, 1 buy, 4 hold, 0 sell, 0 strong sell
Despite being no more than a middle-aged company, PepsiCo has delivered whopping returns over the past five decades. It helps that so much cash is paid out to shareholders. Founded in 1965 by the merger of Pepsi-Cola and Frito-Lay, PepsiCo has increased its dividend every year for 46 straight years. The next five decades might not go down as easily. PepsiCo is working against a long-term slide in soda sales. Like the rest of the industry, it has responded by expanding its offerings of non-carbonated beverages. It sells Gatorade sports drinks, Tropicana juices and Aquafina water, among other brands. That might not be enough to restore it to the growth rates of old, however. One advantage Pepsi has is the Frito-Lay side of the business. Demand for salty snacks remains solid.
Ticker symbol: HD
Lifetime wealth creation: $225.2 billion
Lifetime cumulative return: 523,990%
Current share price: $147.49
Current analyst ratings: 10 strong buy, 3 buy, 6 hold, 0 sell, 0 strong sell
Home Depot has been a publicly traded company since 1981. It was included in the S&P 500 index in 1988 and added to the Dow in 1999. Yet, shares in the nation's largest home-improvement chain have generated a big chunk of their gains just in the last six years. The collapse of the housing market that precipitated the Great Recession of the late 2000s was a painful period for Home Depot. It's resurgence since on the back of low mortgage rates – coupled with a shortage of new housing – has remade its fortunes of late. Shares of Home Depot have gained 162% in the last five years alone. After notching an all-time high this year, it remains to be seen how much upside is left, at least in the short term.
Ticker symbol: INTC
Lifetime wealth creation: $246.0 billion
Lifetime cumulative return: 119,590%
Current share price: $35.01
Current dividend yield: 3.1%
Current analyst ratings: 12 strong buy, 2 buy, 7 hold, 1 sell, 2 strong sell
Intel is an old-timer among publicly traded technology companies. The semiconductor manufacturer held its initial stock offering way back in 1971. Intel ran away with the market for the chips that are a computer's brain in the early years of PC sales. The company had close to 100% market share in central processing units for personal computers at one point. It still has 80% today. But PC sales are like a slowly melting iceberg. Softening the blow, Intel remains the biggest player in making CPUs for back-end servers, which are very much in demand in order to power the rapid shift to cloud-based computing. What's troubling is that Intel missed opportunities to make chips for mobile devices, which is where much of future growth lies. Intel was added to the Dow in 1999, near the height of the dot-com boom.
Ticker symbol: WFC
Lifetime wealth creation: $250.8 billion
Lifetime cumulative return: 79,700%
Current share price: $51.68
Current dividend yield: 3%
Current analyst ratings: 6 strong buy, 1 buy, 10 hold, 0 sell, 5 strong sell
Wells Fargo has been in the banking business for a long time – make that a very long time. The company was founded in 1852, and even today its name is synonymous with the iconic six-horse stagecoach of the 19th century American West. Warren Buffett's history with Wells Fargo goes way back, too. His holding company, Berkshire Hathaway, first started buying shares of the bank in 1989. Today, Berkshire is Wells Fargo's largest shareholder with a nearly 10% stake worth more than $25 billion. Like most of Buffett’s moves, this investment has worked out pretty well over the long haul. Wells Fargo's stock crashed hard during last decade’s financial crisis but has since gone on to rise six-fold despite a fake-accounts scandal that cost the CEO his job last year.
Ticker symbol: MRK
Lifetime wealth creation: $265.7 billion
Lifetime cumulative return: 791,780%
Current share price: $61.49
Current analyst ratings: 7 strong buy, 1 buy, 3 hold, 1 sell, 0 strong sell
Merck is the top-performing drug maker on this list with lifetime wealth creation between 1926 and 2015 totaling more than a quarter-trillion dollars. This shouldn’t come as a surprise considering Merck’s corporate pedigree. The company was established in 1891, and the stock has been a component of the Dow since 1979. The Merck family’s involvement in the pharmaceutical business dates back to 17th century Germany. The 21st century has been less kind, however. The stock price, adjusted for splits and dividends, remains well below its 2000 peak near $95 a share. In the past 17 years, Merck has experience plenty of ups and downs, from the Vioxx recall in 2004 to its megamerger with Schering-Plough in 2009. With nearly $40 billion in annual sales, Merck remains a formidable player in the global drug business. Whether the stock can regain its former glory remains to be seen.
Ticker symbol: GOOGL
Lifetime wealth creation: $276.5 billion
Lifetime cumulative return: 1,520%
Current share price: $926.18
Current analyst ratings: 21 strong buy, 3 buy, 3 hold, 0 sell, 0 strong sell
Alphabet has certainly made the most of its relatively short time as a publicly traded company. Shares of what was then known as Google – the corporate name was changed to Alphabet in 2015 – were initially offered to the public just 13 years ago, and by the end of the first trading day in August 2004 the company was worth $27 billion. Today, Alphabet has a market value of $635 billion. The Google search engine is Alphabet's most important business, but not its only one, thus the name change two years ago. Alphabet is also home to self-driving car startup Waymo; Nest Labs, a developer of gadgets for the Internet of Things; and X, which describes itself as a “moonshot factory” trying to invent technologies that will make the world a radically better place.
Ticker symbol: DD
Lifetime wealth creation: $299.5 billion
Lifetime cumulative return: 791,980%
Current share price: $81.18
Current dividend yield: 1.9%
Current analyst ratings: 5 strong buy, 0 buy, 5 hold, 0 sell, 0 strong sell
The chemical giant got its start more than 200 years ago when E.I. du Pont bought land near Wilmington, Delaware, to set up powder mills. The company, of course, has evolved substantially since 1802, and it’s about to undergo perhaps the most radical transformation in its history. Effective August 31, 2017, DuPont will officially merge with Dow Chemical. The next day, shares of the newly combined company are slated to begin trading under new ticker symbol “DWDP.” DuPont’s future as a component of the Dow Jones Industrial Average is uncertain once the merger is complete. The stock was first included in the Dow in 1924, but it was dropped a year later. DuPont was added back to the industrial average in 1935, where it has remained for more than 80 years.
Ticker symbol: AMZN
Lifetime wealth creation: $300.2 billion
Lifetime cumulative return: 45,060%
Current share price: $958.47
Current analyst ratings: 21 strong buy, 4 buy, 4 hold, 0 sell, 0 strong sell
Amazon.com, which began life as a modest website for book buyers, is celebrating its 20th anniversary as a publicly traded company. It's been a heck of a ride for shareholders since the 1997 market debut, as evidenced by Bessembinder’s calculations of lifetime wealth creation and percentage return. The current bull market has been especially kind to Amazon investors, with the share price experiencing a 14-fold increase since March 2009. The stock now trades around $1,000, even after adjusting for three splits in the late 1990s. Amazingly, Amazon's best days may still lie ahead. In additional to evolving into the nation’s largest e-commerce company, Amazon is also a leader in cloud computing. Its recent acquisition of Whole Foods is threatening to disrupt the grocery business, and package delivery by drones could become reality in the not-too-distant future.
Ticker symbol: T
Lifetime wealth creation: $302.6 billion
Lifetime cumulative return: 39,350%
Current share price: $37.37
Current dividend yield: 5.2%
Current analyst ratings: 5 strong buy, 1 buy, 13 hold, 0 sell, 0 strong sell
AT&T has a long and winding corporate history that started with Alexander Graham Bell’s invention of the telephone in 1879. The company quickly came to dominate the telecommunications industry for decades. In 1984, regulators broke up AT&T into seven regional phone companies, known as Baby Bells. AT&T retained its long-distance business. Many years and many mergers later, one of those original Baby Bells, Southwestern Bell (renamed SBC Communications), acquired the original AT&T in 2005 and adopted the AT&T name. Today, AT&T is a big dividend payer and a major player in wireless, Internet and satellite-TV services, with more than $163 billion in annual revenue. The company’s stock has a long and winding history, too. AT&T, then known as American Telephone and Telegraph, was first included as a component of the Dow in 1916. Over the past century, it has moved in and out of the industrial average a number of times. Most recently, Apple bumped AT&T from the Dow in 2015.
Ticker symbol: KO
Lifetime wealth creation: $327.0 billion
Lifetime cumulative return: 6,663,400%
Current share price: $45.67
Current dividend yield: 3.2%
Current analyst ratings: 3 strong buy, 0 buy, 11 hold, 0 sell, 0 strong sell
Coca-Cola (the drink) was invented in 1886, a decade before the creation of the Dow. Coca-Cola (the stock) made a brief appearance as a component of the industrial average in the 1930s. Shares were added back to the Dow in 1987, and they’ve remained a stalwart member ever since. Like PepsiCo, Coca-Cola (the company) is adding everything from bottled water to fruit juices to sports drinks to its product lineup to make up for slowing soda sales. Unlike PepsiCo, Coca-Cola doesn’t have the equivalent of Pepsi’s Frito-Lay snack business to offset slumping soda sales. Over the past five years, shares in Coca-Cola are up just 16% versus a 61% gain for PepsiCo. At least the company's commitment to its dividend should be a source of comfort to income investors. Coca-Cola has paid a dividend since 1920, and that dividend has increased annually for 54 straight years.
Ticker symbol: CVX
Lifetime wealth creation: $330.4 billion
Lifetime cumulative return: 945,430%
Current share price: $106.48
Current dividend yield: 4.1%
Current analyst ratings: 10 strong buy, 2 buy, 5 hold, 0 sell, 2 strong sell
Chevron is yet another member of the Dow delivering a disproportionate share of the stock market’s total wealth creation over 90 years. It's also been a reliable deliverer of dividend income. With 31 consecutive years of annual growth in its cash payouts to shareholders, Chevron's track record instills confidence that the dividend will continue to rise well into the future. Chevron’s origins as a company date back to the 19th century and run through John D. Rockefeller's legendary oil empire. Chevron operated for decades as Standard Oil of California, though the Chevron brand was used on products as far back as the 1930s. The corporate name didn’t officially change to Chevron Corp. until 2005. (Immediately prior to that the company was known as ChevronTexaco in recognition of its 2001 merger with Texaco.) Chevron, under its various names, was a component of the Dow from 1930 to 1999, and then again from 2008 to the present.
Ticker symbol: PG
Lifetime wealth creation: $335.8 billion
Lifetime cumulative return: 537,700%
Current share price: $92.47
Current analyst ratings: 4 strong buy, 1 buy, 7 hold, 0 sell, 0 strong sell
When it comes to income investing, Procter & Gamble is synonymous with reliability. The company has paid shareholders a dividend since 1891 and has raised its dividend annually for 60 years in a row. P&G’s inclusion in the Dow dates back to 1932. Few stocks are as venerable and dependable. P&G's products are also known for reliability. The company owns some of the best-known brands in the business including Charmin toilet paper, Crest toothpaste, Tide laundry detergent, Pampers diapers and Gillette razors. Despite selling consumer staples that are supposed to be less sensitive to the ups and downs of the economy, P&G is sensitive to competition. The growing popularity of discount retailers stocking cheaper store brands has been particularly challenging. Look to the stock price for proof: Shares in P&G have gained 39% in the last five years versus a 72% gain for the S&P 500.
Ticker symbol: WMT
Lifetime wealth creation: $337.7 billion
Lifetime cumulative return: 149,540%
Current share price: $79.31
Current dividend yield: 2.6%
Current analyst ratings: 11 strong buy, 0 buy, 10 hold, 0 sell, 2 strong sell
It stands to reason that the world's largest retailer happens to have one of the best-performing stocks over the long haul. But it's been a long road to greatness. At the close of its first day of trading on the New York Stock Exchange in 1972, Walmart was worth 4 cents a share, adjusted for splits and dividends. Today it trades north of $80 a share. From humble beginnings as a single discount store, Walmart now operates 11,695 retail locations around the globe and employs 2.3 million workers. Nimble, thy name is not Walmart. Amazon has emerged as a dangerous competitor, and although Walmart is building up its e-commerce business, it remains to be seen whether it’s a case of too little, too late. A component of the Dow since 1997, Walmart has increased its dividend every year since 1974.
Ticker symbol: JNJ
Lifetime wealth creation: $383.7 billion
Lifetime cumulative return: 2,930,670%
Current share price: $132.63
Current dividend yield: 2.5%
Current analyst ratings: 5 strong buy, 1 buy, 7 hold, 0 sell, 2 strong sell
Johnson & Johnson operates in several different areas of health care including pharmaceutical products and medical devices. The company is best known, however, for its over-the-counter consumer brands including Listerine mouthwash, Tylenol pain reliever and Johnson’s Baby shampoo. J&J has been at the health-care game for a very long time. Founded in 1886 by three brothers, the company created the first commercial first aid kits and it was the first to mass-produce dental floss – all before 1900. Its iconic Band-Aid bandages hit the market in 1921. Somewhat surprisingly, J&J wasn’t added to the Dow until 1997, even though shares had been publicly traded since 1944. The ever-rising dividend, along with the popularity of its products, eventually made the stock too conspicuous to ignore. J&J has increased the amount of its annual payout to shareholders every year since 1963.
Ticker symbol: GM
Lifetime wealth creation: $394.1 billion
Lifetime cumulative return: 5,900%
Current share price: $34.83
Current dividend yield: 4.4%
Current analyst ratings: 4 strong buy, 1 buy, 8 hold, 0 sell, 0 strong sell
General Motors was a titan of industry in 20th century America. The auto maker’s stock first joined the Dow in 1915. It was dropped from the industrial average a year later before being added back in 1925. It remained a component of the Dow until GM was forced into bankruptcy in 2009. Prior to its Chapter 11 filing and delisting from the New York Stock Exchange, the shares created an impressive amount of wealth, paying out over $64 billion in dividends to its shareholders. “GM common stock was one of the most successful stocks in terms of lifetime wealth creation for shareholders in aggregate, despite its ignoble ending,” says Bessembinder. Although the original GM stock was one of the great winners of the last century, its recent fortunes haven't been as bright. Shares in the new GM are up just 6% since the 2010 initial public offering. The S&P 500 index has more than doubled over the same span.
Ticker symbol: MO
Lifetime wealth creation: $448.1 billion
Lifetime cumulative return: 202,963,040%
Current share price: $63.69
Current dividend yield: 3.8%
Current analyst ratings: 4 strong buy, 0 buy, 6 hold, 0 sell, 0 strong sell
Altria has an illustrious corporate history that can be traced back to a 19th century tobacco shop in London. Today, the company’s operating businesses continue to focus on tobacco including cigarettes (Philip Morris USA), smokeless tobacco (U.S. Smokeless Tobacco) and cigars (John Middleton). Altria also owns St. Michelle Wine Estates, a major wine producer. The company is best known for its iconic Marlboro brand of cigarettes, but at one time or another Altria and its predecessors had a hand in other famous names including Miller Brewing and Kraft Foods. The stock originally joined the Dow in 1985, when the company was called Philip Morris Cos. The name changed to Altria in 2003, and the stock was replaced in the Dow in 2008. Philip Morris International is a separate publicly traded company that was spun off from Altria in 2008 to sell cigarettes outside the U.S.
Ticker symbol: IBM
Lifetime wealth creation: $487.4 billion
Lifetime cumulative return: 9,456,410%
Current share price: $139.70
Current dividend yield: 4.3%
Current analyst ratings: 4 strong buy, 1 buy, 9 hold, 1 sell, 3 strong sell
Think of IBM as the granddaddy of tech stocks. The company, which began operating under its current moniker in 1924, was originally included in the Dow from 1932 to 1939. It was added back to the industrial average in 1979 and remains a component to this day. In many ways, IBM's history is a history of 20th century technological progress. As for the current century, it's a tougher call. IBM produces computer hardware and software for businesses. Consulting is another important area of operation. However, cloud-based services appear to be the future, and IBM has no shortage of competition. Amazon, Microsoft, Google, Oracle and Cisco Systems are some of the well-known tech companies jostling for space. Warren Buffett read IBM’s annual reports for decades before finally taking a stake in 2011. It’s looking more and more like Buffett made a rare bad call. So far, at least, his investment in IBM has been a major disappointment.
Ticker symbol: MSFT
Lifetime wealth creation: $567.7 billion
Lifetime cumulative return: 83,440%
Current share price: $72.49
Current dividend yield: 2.2%
Current analyst ratings: 16 strong buy, 1 buy, 4 hold, 4 sell, 1 strong sell
In 1975, Bill Gates dropped out of Harvard to start a computer company with childhood friend Paul Allen. In 1985, the first Windows operating system went on sale. A year later, Microsoft went public at $21 a share (or the equivalent of 6 cents a share once the price is adjusted for stock splits and dividends). The company quickly revolutionized personal computing and created a generation of so-called Microsoft Millionaires. Not long ago, Microsoft's glory days looked to be behind it as sales of desktop PCs slipped into a seemingly irreversible decline amid the consumer shift to mobile technology. However, the company is experiencing a renaissance thanks to the move away from licensed software to cloud-based subscription software. Today, Microsoft is a top player in cloud computing and its stock reflects this success. Shares have tripled the return of the S&P 500 index over the past two years alone. Microsoft joined the Dow in 1999 at the height of the dot-com bubble.
Ticker symbol: GE
Lifetime wealth creation: $597.5 billion
Lifetime cumulative return: 922,170%
Current share price: $24.55
Current dividend yield: 3.9%
Current analyst ratings: 4 strong buy, 1 buy, 4 hold, 0 sell, 2 strong sell
General Electric holds a special place in the history of the stock market: It’s one of the 12 stocks that made up the original Dow Jones Industrial Average of 1896. Perhaps even more impressive, GE is still in the Dow today. (It was dropped a couple of times in its early years before being added back for good in 1907.) The company has undergone tremendous change over time. GE’s latest transformation was spawned during last decade’s Great Recession. In response to tightening regulations, management was compelled to sell off the company’s sprawling financial operations, a powerful source of profits. The GE of today is a pure industrial conglomerate, and investors aren’t quite sure what to make of its prospects. The stock has lost 36% of its value over the last 10 years. Warren Buffett, renowned for his patience, recently threw in the towel and sold his remaining stake in GE.
Ticker symbol: AAPL
Lifetime wealth creation: $677.4 billion
Lifetime cumulative return: 20,250%
Current share price: $157.50
Current analyst ratings: 19 strong buy, 6 buy, 6 hold, 0 sell, 2 strong sell
What’s left to say about Apple? With a market capitalization exceeding $800 billion, it’s far and away the most valuable publicly traded company today. Investors can thank the iPhone for the eye-popping run-up in the value of the stock in recent years. Before Steve Jobs debuted the revolutionary smartphone in 2007, Apple was a well-regarded maker of pricey personal computers that catered to niche markets. In the 10 years since more than a billion iPhones have been sold, and shares of Apple have gained a whopping 620%. Jobs died in 2011, but the company he co-founded lives on today. The iPhone 8 is expected to be released later this year. Adding to Apple’s many accolades was its inclusion in the Dow in 2015, replacing AT&T. The stock went public in 1980.
Ticker symbol: XOM
Lifetime wealth creation: $939.8 billion
Lifetime cumulative return: 2,258,470%
Current share price: $76.64
Current dividend yield: 4%
Current analyst ratings: 4 strong buy, 3 buy, 8 hold, 0 sell, 3 strong sell
ExxonMobil created a staggering amount of wealth – nearly $1 trillion – between 1926 and 2015, according to Bessembinder’s research. No doubt the reliable dividend that Exxon has paid out to shareholders since 1882 has contributed mightily to the energy giant’s remarkable performance. Over the last 34 years alone, amid cycles of oil booms and oil busts, the company has increased its dividend payment at an average annual rate of 6.4%. Like rival Chevron, Exxon has to contend with uncertainty regarding the future of fossil fuels, not to mention the persistently low prices for crude oil of late. The stock’s performance reflects that uncertainty. Exxon’s share price is lower today than it was a decade ago. (But, hey, at least the dividend checks kept coming.) Exxon has been part of the Dow ever since the industrial average expanded to 30 companies in 1928. Back then it was known as Standard Oil of New Jersey. The name officially changed to Exxon in 1972.
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