The best blue-chip stocks over the last 10 years

CommSec have found the standout stocks of the past decade and there’s one particular company that’s been a real winner.

A couple of weeks ago I showed the best performing listed shares for 2023… and the duds of the year. Overall, the winners were resource stocks (coal miners in particular) and the duds were tech stocks. You can read more here.

CommSec has gone one better and done the numbers on the best performing blue chip stocks over the last 10 years. Now, once again, a reminder that past performance is no guarantee of future performance… but the stock gurus I talk to on The Call (www.ausbiz.com.au midday, weekdays) are generally all still fans of CSL and Macquarie Bank.

CommSec identified the returns on the top 30 listed companies (by market capitalisation) based solely on share price performance and dividends paid over the last 10 year period for a holding of 100 shares.

The data on share prices and dividends are supplied by Iress and the total return calculation assumes that dividends are not reinvested over time.

The net dollar returns are calculated as: (100*(end 2022 share price + dividends from 2013-2022))-(end 2012 share price *100). Costs, fees and taxes are not included.

CSL Limited: the stand-out investment

If you bought 100 shares in biotechnology company CSL Limited a decade ago, that $5,500 investment would have been valued at almost $29,000 at the end of the 2022 calendar year – a gain of over 400 per cent.

That’s right, CSL generated a return of almost 475 per cent over the period. By comparison, total returns on the ASX 200 index grew by 129.4 per cent over the same period.

The top four over the past decade

So, in dollar terms the best returns from the top 30 biggest companies were CSL ($25,525), followed by Macquarie Group ($17,654), Cochlear ($15,043) and Rio Tinto ($10,445).

Among the broader ASX 200 companies, around 90 stocks exceeded sector average growth over the past decade on share price appreciation alone. And looking at dollar returns, one notable result was property group REA, which generated net returns of just over $12,000 over the past decade on a holding of 100 shares.

What if the focus is on growth, not dollar returns?

Gaming company Aristocrat Leisure (ALL) is the top performer under this measure with its share price and dividend returns soaring over 972 per cent over the past decade.

Gold explorer, Northern Star (NST), was next highest with returns up 871 per cent, ahead of Mineral Resources (MIN), ResMed (RMD) and Fortescue Metals Group (FMG).

Of the companies providing the biggest dollar returns, Macquarie Group was 6th in the rankings of total returns over the decade, with CSL 7th, Cochlear 12th and Rio Tinto 15th.

The value of this analysis

Of course, as CommSec pointed out, there’s a bit of a ‘so what?’ question here. Why should you care about these top performers if you didn’t purchase shares a decade ago?

The main value is that tracking the performance of stocks over a decade is valuable from a research perspective. What are these out-performers doing that under-performers aren’t? What economic and industry conditions have impacted share results over time? How did these companies change over time and what was the affect on their share price?

Understanding these kinds of variables deepens our understanding of portfolio performance over time.

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