Here's a roundup of 5 of the stocks that have had the highest total return over the past 20 years. All are listed in the S&P 500, which is comprised of 505 of the biggest companies in the U.S. market. All of these stocks rose dramatically faster than the S&P 500, which had a 255% total return during the same period. All numbers are as of Dec. 23, 2019.

Key Takeaways

  • Monster created a trend for caffeinated beverages.
  • Tractor Supply Co. supplied the growing number of hobby farmers.
  • Old Dominion increased its efficiency.
  • HollyFrontier rode the shale oil boom.
  • Altria prepared for a decline in cigarette sales.

The stocks on this list surprised us because it included some unexpected names and excluded many big names.

Don't take this as a blanket endorsement. While all of these stocks produced massive returns, the forces that fueled their growth may not continue into this decade.

For example, there are signs that the shale oil boom that boosted HollyFrontier is slowing.

In fact, the companies on this list may demonstrate that it's very hard to predict what companies will be winners years from now.

1. Monster Beverage Corp (MNST)

20-Year Trailing Total Return: 87,560%

The maker of aggressively-branded energy drinks such as BURN and Full Throttle in addition to its eponymous Monster brand, Monster Beverage Corporation (MNST) rose from surprisingly un-extreme beginnings. Before it changed its name to Monster Energy, Hansen Natural Corporation started in the 1930s selling fresh fruit juice, eventually expanding to iced tea and natural sodas. In a radical departure from its past, in 2002 it launched Monster, "the meanest energy drink on the planet," which is not recommended "for children, people sensitive to caffeine, pregnant women, or women who are nursing."

Sales exploded from $92 million in 2002 to more than $2 billion in 2012.  Monster was driving 90% of the company's sales by the time it changed its name to Monster Energy at the beginning of 2012. 

It just goes to show, it's never too late to turn around your image.

2. Tractor Supply Co. (TSCO)

20-Year-Trailing Total Return: 45,750%

Tractor Supply Co. (TSCO) is a retail store targeting a very specific market: people who farm as a hobby instead of to make a living.

The number of these farms, alternately referred to as hobby farms, lifestyle farms, or residential farms, has grown enormously in the past decades. The number of residential farms outside of large cities doubled from the end of 2008 to the end of 2013.

Warning: Past results are not an indicator of future performance!

As of the most recent department of agriculture census, 38% of all farms -- the largest category -- had owners whose primary occupation is not farming. By focusing directly on this market, Tractor Supply Co. has managed to grow despite the harsh headwinds against retailers in the past 20 years.

3. Old Dominion Freight Lines Inc.

20-Year-Trailing Return: 13,340%

Old Dominion Freight Lines is a trucking company specializing in small shipments, that is, "less than truckload" (LTL).

Its growth hasn't been driven by any special trend or major rebranding like Monster or Tractor. It's just an exceptionally well-run business. It has substantially increased its operating ratio, a margin of expenses to sales showing a business's efficiency, from just over 90% in 2006, to under 80% in 2018. It has increased its percentage of on-time deliveries from 94% in 2002, to 99% in 2018. The company has seen a 12.7% annual growth rate in revenue over the past 21 years, expanding its LTL market share from 2.9% in 2002 to 10% in 2018.

4. HollyFrontier Corp.

20-Year-Trailing Return: 11,810%

HollyFrontier Corp. is an oil refining company that was formed from the Holly and Frontier refining companies in 2011. It owns and operates five large refineries in Wyoming, Utah, Kansas, Oklahoma, and New Mexico.

HollyFrontier has had a significant location advantage over other refiners, such as those on the East and Gulf coasts, because its refineries are close to the locations of booming U.S. shale operations. In the past decade, advances in hydraulic fracturing technology have greatly increased U.S. oil production, which more than doubled from 2008 to 2018. Two major centers of this shale boom have been in the Bakken fields in North Dakota and the Permian and Eagle Ford shale formations in Texas, near HollyFrontier's refineries. 

5. Altria Group Inc.

20-Year-Trailing Return: 9,620%

Altria Group is the rebranded name for Phillip Morris, maker of tobacco products including Marlboro cigarettes. In 2003, it changed its name to Altria Group and spun off its international operations as Phillip Morris International in 2008.

Part of Altria's growth came before it spun off its international business, returning 2,340% between the end of 1999 and March 2008. That year, the two companies split as sales rose in international markets. However, since the split, Altria has actually outperformed Phillip Morris International, returning 328% versus Phillip Morris International's 190%, according to YCharts.

Altria pulled ahead in 2014 when Phillip Morris International's sales started to fall. Although the number of cigarettes Altria sold had been falling since 2009, they had implemented a host of cost-cutting measures and price increases to offset this. Its profits rose even as sales fell.

With more consumers favoring e-cigarettes, Altria is relying on its sizable stake in e-cigarette maker Juul, and a joint venture with Phillip Morris International to produce a product that heats, but doesn't burn tobacco, called IQOS.