The Best-Performing Stock Since 1980


Source: Wikimedia Commons.

Before reading this, I challenge you to figure out what American company has had the best performing stock since 1980. My guess is that you won't take me up on that. And for good reason -- because doing so isn't as easy as it sounds.

It's for this reason that I was, for lack of a better phrase, blown away when I came across a table of the top 20-plus stocks over the last 33 years buried deep inside a presentation given by the chief financial officer of M&T Bank at this year's Barclays Global Financial Services Conference.

For most investors it would take an extraordinary amount of time and effort to compile such a list. And even then, many wouldn't be able to do so for the simple reason that they don't have access to a sufficiently comprehensive database of stock prices.

To slightly rephrase the question, then, what would you guess the top stock was?

If Berkshire Hathaway (NYSE: BRK-A  ) came to mind, you're not far off.

Since the blessed year of my birth -- 1980, that is -- Warren Buffett's company has notched a compound annual growth rate of a staggering 20.8% -- this is assuming that all dividends were reinvested (of which there has only been one such payout in Berkshire's history, so this assumption is more appropriate for the companies below).

But while that's virtually unheard of, it was only good enough to secure the 15th place on the list.

Another company that you probably won't be surprised to learn is on the list is Wal-Mart (NYSE: WMT  ) . Placing sixth, the world's largest retailer outpaced Buffett's performance by turning in a CAGR of 21.9%.

And Wal-Mart wasn't the only retailer to score at the top of the heap, as both the second and third best-performing stocks over this time period were in the same industry.

L Brands (NYSE: LB  ) , which operates as a specialty retailer under multiple brand names including Victoria's Secret and Bath & Body Works, came in third with a CAGR or 22.9%. And The Gap (NYSE: GPS  ) , which operates an eponymous line of stores, as well as Old Navy and Banana Republic, among others, came in second with a CAGR of 24%.

So, what company was able to top this? It's none other than Eaton Vance (NYSE: EV  ) . Does that surprise you? Have you ever even heard of Eaton Vance? If you're anything like the rest of us, you probably haven't.

By its own description, Eaton Vance's "principal business is managing investment funds and providing investment management and advisory services to high-net-worth individuals and institutions." It's an investment advisory service, in other words, catering to extremely rich people and other companies in the advisory industry.

Since 1980, Eaton Vance's stock has achieved a market-leading (literally!) 25.2% CAGR.

Now, I know percentages and compounding can be hard to get one's head around intuitively. So let me break it down like this: $1,000 invested in Eaton Vance in 1980 would be worth over $1.3 million dollars today.

Pretty insane, right?

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  • Report this Comment On September 20, 2013, at 12:30 PM, henry52 wrote:

    My wife started with them in 1985 and we started buying day one till 2012 she was sure I was wrong to buy. Now she can not believe what she see's on the statement and we have used some gains over years for down payment on farm. I seen Sam at couple meeting and the power he had to lift you up was a blessing for me. My wife personally meet him at his small office area and got her picture with him she came home with so much energy I could see the stock would be great. He wanted to share his money with all.

  • Report this Comment On September 26, 2013, at 7:28 PM, angler147 wrote:

    How about posting the entire Top Stocks as you referred to in your article?

    "It's for this reason that I was, for lack of a better phrase, blown away when I came across a table of the top 20-plus stocks over the last 33 years buried deep inside a presentation given by the chief financial officer of M&T Bank at this year's Barclays Global Financial Services Conference.

    Thank you for considering this request.

  • Report this Comment On November 19, 2013, at 12:13 PM, clinger9 wrote:

    what about HD? I think that stock should be part of the list.

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