Most companies just aim to compete, profit, and win -- a very few totally change the game. Social media giant Facebook (META 1.10%) has altered how nearly 2 billion people spend their idle time; e-commerce will never be the same thanks to Amazon.com (AMZN -0.68%); and global diversified manufacturer Dover Corp. (DOV -0.42%) may not be a household name, but its incredible string of dividend hikes has set it apart from its peers. Read on to learn why these three stocks have become history-makers.
No end in sight
Tim Brugger (Facebook): It's been more than five years since Facebook went public, yet it is still growing every quarter like a blazing hot upstart. Its 51% jump in advertising revenue last quarter to $7.86 billion was impressive, as was its jaw-dropping 49% increase in total revenue to $8.03 billion. But both of Facebook's top-line results pale in comparison to its history-making popularity.
Believe it or not, there were pundits who voiced concerns a couple of years ago that user saturation would eventually hamper Facebook's extraordinary growth. As it turns out, those concerns were unfounded, to say the least. Last quarter Facebook reported a 17% increase in monthly average users (MAUs) to a mind-boggling 1.94 billion.
To put Facebook's growing popularity into perspective, as of the end of March there were 3.74 billion internet users on the planet, which means 52% of the global connected population visits Facebook every month. More impressive still, 1.28 billion, or 34% of all those internet users, access Facebook each and every day.
As for a growth investment, Facebook's long-term prospects are without equal. It continues to report sky-high quarterly revenue gains, and it has not even started to monetize the billion-plus MAUs boasted by both WhatsApp and Messenger. According to several analyst estimates, Instagram is generating revenue at a nearly unheard of clip, and with over 700 million MAUs its user base is growing faster than ever.
Facebook stock has already risen a remarkable 38% this year, and when its next earnings report arrives on July 26, don't be surprised to see yet another blowout quarter drive it even higher. It's a history-making company if ever there was one.
Creating history where it matters
Neha Chamaria (Dover Corp.): When you look at Dover's business, you'd might not see anything special at first. It's a diversified industrials company that manufactures a wide variety of equipment and components, operating in four broad segments: Engineered systems (industrials and fast-moving consumer goods), energy, fluids (pumps and filtration systems), and refrigeration and food equipment. Through a combination of aggressive acquisitions and organic growth, Dover has maintained strong double-digit operating margins through the past decade. That's good, but not quite history-making material.
Where Dover has made history, though, is its dividends – the company is not only among the few industrial stocks – nine by my last count -- to have made it to the elite Dividend Aristocrat list; it's also among only six that have raised their dividends for 60 straight years or more. Last August, Dover hiked its dividend by 5%, its 61st consecutive annual increase.
Another dividend hike next month, and Dover will become the second publicly listed company to have offered its shareholders higher dividends for 62 straight years. What's more, those numbers also mean that Dover has been raising its dividends since its very formation – the company was founded in 1955. Dover is certainly making history in more ways than one.
For shareholders, Dover's disciplined capital allocation policies and unparalleled dividend streak have been richly rewarding. In terms of total returns (price appreciation plus dividends), the stock has doubled in the past 10 years. As an investor, you're unlikely to go wrong by owning a stock that's making history by putting shareholders' interests at the forefront.
History at the speed of the internet
Rich Duprey (Amazon.com): Few companies have ever been so responsible for a seismic industry shift as Amazon.com is when it comes to the changes underway in retail. Not only did no one realize 20 years ago how profoundly an online bookseller would change the way the world shopped, but many even doubted it would survive very long.
Analysts routinely disparaged the e-commerce company's strategy of foregoing profits to focus on increasing scale, but it worked. Amazon has become a retail juggernaut with sales that surpassed $400 billion, and its success has led many investors to wonder if the old bricks-and-mortar model of retail can survive.
One need only look at retail's all-important Christmas holiday season to see the impact Amazon has had. Its share of total holiday spending online last year was 38%, while the next closest competitor was Best Buy with just a 3.9% share. Wal-Mart came in a distant fourth place with 2.6%. Another telltale sign can be found in its Amazon Prime Day data, which just passed. The once-a-year sale event for its loyalty program members was the e-commerce leader's biggest sales day ever, and sales were 60% higher than the 2016 retail event.
Amazon.com has its fingers in so many pies it's almost hard to track. Beyond retail, its Amazon Web Services unit is provides critically important cloud computing services to businesses. The company may also change how small business lending works with its Amazon Lending program.
When investors think of companies that have made history by transforming entire industries, the one name that should leap to mind immediately is Amazon.com.