The best-performing stocks over the past 20 years represent different sectors and industries, but they all rose to new levels of prominence through innovation and effective merger and acquisition (M&A) strategies. Technology and biotechnology, two areas with significant expansion over the past two decades, are disproportionately represented among the fastest-appreciating stocks. These six stocks have been among the best long-term equity investments available since 1996, and they all experienced compounding annual returns above 24%.
Keurig Green Mountain
In February 1996, shares of Keurig Green Mountain, Inc. (NASDAQ: GMCR) were worth $0.23 each, adjusting for splits and dividends. GMCR shares trade at $89.86 as of Feb. 12, 2016, representing 34.8% compounding annual returns over the 20-year span. The company paid dividends per share of $2.475. Keurig Green Mountain was founded in 1981 as a specialty coffee roaster, but the business grew explosively as the popularity of its brewing systems and K-Cups took off more recently. A December 2015 announcement that JAB Holding Company planned to acquire the company brought shares to the current price.
Celgene Corporation (NASDAQ: CELG) shares cost $99.59 as of Feb. 12, 2016, but they were only 70 cents in February 1996, adjusting for dividends and stock splits. This amounts 28.1% compounding returns. Celgene sells popular medications, including Thalomid and Revlimid. The company built a large drug portfolio through research and development (R&D) and acquisitions, and it receives royalties on some products in addition to sales revenue. Celgene is one of the world's largest biotechnology firms, with a market capitalization of $80 billion.
Apple, Inc. (NASDAQ: AAPL) is a well-known computer company that rose to prominence in the 1970s and 1980s before experiencing a protracted decline the early and mid-1990s. In 1996, Apple shares were trading at 91 cents, adjusting for stock splits and dividends. After successfully designing and marketing popular products, such as the iPod, MacBook, iPhone and iPad, and creating disruptive associated software, such as iTunes and the App Store, shares are worth $93.99 as of Feb. 12, 2016, appreciating 26.1% on a compounding annual basis. As of early 2016, Apple is the largest publicly traded company in the world, and its market cap is $520 billion.
Alphabet, Inc. (NASDAQ: GOOGL) is the company that owns Google and the diverse group of former operations under the Google umbrella. Founded in 1998, the company began generating revenues from search advertising technology as it rose to dominate the Internet search market. In addition to dominating Internet search advertising globally, Google added a large number of different offerings to its business portfolio, even branching into unrelated industries, such as life sciences. It also acquired the mobile operating system Android, which is the most widely used mobile OS in the world as of 2016. When the company had its initial public offering (IPO) in August 2004, shares were $50.22 when adjusted for splits and dividends. As of Feb, 12, 2016, shares are $706.36, for a compounding annual return of 25.6%. Alphabet is now one of the world's largest companies, with a market cap of $485 billion.
Adjusting for stock splits and dividends, shares of Gilead Sciences Inc (NASDAQ: GILD) were $1.10 in February 1996. On Feb. 11, 2016, the share price is $87.36, representing 24.5% compounding annual returns. Through acquisitions and internal research, the company has built an extensive drug portfolio. The $126 billion firm is now one of the biggest biotechnology firms in the world, with popular selling drugs Harvoni, Sovaldi, Truvada and Atripla.
Balchem Corporation (NASDAQ: BCPC) is somewhat smaller than the other top performers, but it has risen from an even smaller scale in 1996. Adjusting for splits and dividends, Balchem shares were $1.09 20 years ago. Since February 1996, the company has achieved 22.4% compounding annual appreciation, with shares now trading at $61.76. The New Hampton, New York-based company has 800 employees and provides chemicals and inputs for diverse applications, including animal health, human nutrition and health care. Balchem's market cap is just under $2 billion.