While it's well-known fact that the stock market can't rise every single year, apparently a few well-known companies didn't get that memo.
You see, coming out of the steepest recession in 70 years, and now basking in the longest economic expansion in U.S. history, has proved the perfect recipe for a handful of companies to deliver gains every single year since the end of 2008. Yet, what's really surprising is the variety and mix of brand-name businesses that have thrived over the past 11 years, despite periods of stock market instability and volatility.
While I can't guarantee a 12th consecutive year of gains is in the cards in 2020, the following five brand-name stocks have been guaranteed moneymakers on a total return basis (i.e., including dividends paid) for investors since 2008.
Generally, utility stocks are safe, boring businesses that are flocked to by investors when economic growth is slowing or the stock market is experiencing a period of unrest. But don't tell that to NextEra Energy (NEE -0.58%), the largest publicly traded electric utility by market cap in the United States. NextEra Enery not only hasn't had a down year since 2008, but it's ended eight of the past 11 years higher by a double-digit percentage, and has outpaced the returns of the benchmark S&P 500 in each of the past four years.
What makes NextEra Energy so different is the company's focus on renewable energy. No utility is currently generating more electricity from wind and solar than NextEra. While these investments have been pricey, the company has benefited from a historically low interest rate environment to make these investments, and should see its electricity generation costs come in well below its peers that haven't made the move to greener energies.
As a result of its clean-energy resolve, NextEra has the ability to grow its earnings per share at a high single-digit to low double-digit rate for years to come. That appears to be making investors very happy.
The so-called "House of Mouse" has been the "house of outperformance" for 11 years and counting. Walt Disney (DIS 0.93%), which has eked out four annual gains of less than 4.7% over the past 11 years, also sports four years where it's delivered at least 33.5% in returns for its shareholders over the same time frame.
I think it goes without saying that Disney's movie franchises have played a mammoth role in its 11-year streak of delivering for its shareholders. Studio revenue in fiscal 2019 (ended in September) wound up surpassing $11.1 billion, with Disney reaping the benefits of the Star Wars, X-Men, Marvel, and Pixar animated franchises. Disney's content vault is unbelievably rich with new and old content, giving it the ability to engage consumers and create emotional attachments across generations that few content providers are able to do.
Also, don't overlook the innovation here. Stepped-up efforts to provide direct-to-consumer services, such as streaming, in domestic and overseas markets should be a leading growth driver for Disney over the next couple of years.
Arguably the most impressive brand-name stock on this entire list is McCormick (MKC), the spices, mixes, and condiments provider responsible for such brands as French's, Lawry's, Frank's Red Hot, and of course, McCormick. Over the past 11 years, McCormick's total return has hit at least 10% every...single...year. Although it's underperformed the benchmark S&P 500 in nearly half of the past 11 years, there's been few steadier performers in the shareholder return column than McCormick.
The secrets to McCormick's success are twofold. First, it's selling consumer staples in spices, mixes, and condiments, which essentially border on being basic-need goods. Although consumer staples stocks like McCormick can be exposed to pricing pressures and ingredient shortages from time to time, consumer demand for McCormick's products remains predictable, giving the company ample pricing power.
The other aspect here that's allowed McCormick to thrive is the ability to grow inorganically and tighten its belt when needed. A recent combination of cost-cutting, paired with the addition of Lawry's and Stubbs's Bar B-Q sauce via a 2017 acquisition, has led to top-line expansion and operating margin improvement. One thing is certainly for sure: investors have loved these tasty returns since 2008.
Another incredibly steady performer year in and year out is warehouse club Costco Wholesale (COST 0.58%). With the exception of 2016, which required Costco's dividend to push investor's total return into the green for the year, this company has gained a double-digit percentage every year since 2008.
Although Costco would appear to be prone to the cyclical nature of consumer buying habits, it has a few tricks up its sleeve that help it handily outperform. For instance, as a bulk buyer, Costco is able to use its size to negotiate better deals for its members, while also improving its margins. Additionally, because consumers need to pay for a membership to shop in its stores, they're more likely to stay loyal to the Costco brand, rather than head elsewhere. This only further increases Costco's pricing power.
This member loyalty can't be understated. Despite passing along membership price increases to consumers from time to time, there's been little slowdown to Costco's ability to grow both standard and Executive memberships.
Lastly, heath insurance giant and pharmacy-care services provider UnitedHealth Group (UNH -0.23%) has been unstoppable for 11 years and counting. UnitedHealth's worst year was 2012, where its total return was "only" 8.6%. Comparatively, investors have been treated to five years since 2011 where total return has been, at worst, 36.1%.
Although UnitedHealth Group has four core business segments, health insurance and Optum continue to be the main drivers. In spite of a challenging environment that regularly sees lawmakers chastise healthcare companies for their billing practices, UnitedHealth has had little issue growing its enterprise and individual insured base of members over the years. And, as is typical of insurance companies, it's had no problem passing along higher premiums to ensure its growth rate doesn't stagnate.
By a similar token, UnitedHealth has seen solid growth out of Optum, with everything from pharmacy benefits to data analytics software contributing to its growth.
The only question now is, can UnitedHealth and the other companies on this list deliver a 12th consecutive year of gains for investors in 2020?