Top 15 Wealth-Creating Stocks of the Past 10 Years: Morningstar

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In a new blog post, Amy Arnott, a portfolio strategist for Morningstar Research Services, lists the 15 stocks that have created the most value in dollar terms over the past decade, an estimated total of $15.9 trillion in shareholder wealth.

To identify these stocks, she focused on those that created the most wealth based on the change in their market capitalization — which reflects the current stock price multiplied by total shares outstanding — from 2014 through 2023. She added in the total value of dividends paid and share repurchases over the same period.

“Owning shares in an individual stock is a lot riskier than owning a broadly diversified fund, and the odds of experiencing a loss are much higher,” Arnott wrote. “However, if you manage to invest in a profitable stock, the upside can be much greater.”

She said this is especially true as companies with outstanding financial results and share-price performance can continue to outshine competitors over many years.

“Most of the companies on my list were already mega-cap stocks 10 years ago,” Arnott says.

More broadly, the “Magnificent Seven” group of large-cap tech stocks — Apple, Amazon, Microsoft, Alphabet, Nvidia, Meta Platforms and Tesla — created about $12 trillion in shareholder value over the 10-year period, making up about three fourths of the total for the top 15.

From a sector perspective, it is not surprising that technology-related stocks dominate the list, given that they have generated excess returns of more than 8 percentage points versus the broader market over the past decade.

An economic moat, or sustainable competitive advantage, is another common characteristic of the top 15 wealth creators. An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. 

Only 15% of the companies in Morningstar’s coverage have a wide economic moat rating, while 30% have a narrow moat and the remaining 55% have no moat. However, 13 of the top 15 wealth-creating stocks have wide economic moat ratings based on analysts’ assessments, while the remaining two have narrow moats. 

“In other words, economic moats have been key to shareholder value creation,” Arnott says.

Growth has also been an important trait of the top 15 stocks, which generated significantly better growth in revenue, operating income and free cash flow than the market over the past 10 years.

On average, they also sport a value-growth score, which reflects the aggregate expectations of market participants for future growth and required rates of return, nearly double that of the overall market. 

See the accompanying gallery for the top 15 value-creating stocks of the past decade. All data are as of March 31.

(Image: Adobe)

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