In this piece, we will take a look at the 13 best performing S&P500 stocks over the past five years. If you want to skip our introduction to one of the most widely followed and coveted stock market indexes in the world, then take a look at 5 Best Performing S&P 500 Stocks in the Last 5 Years.
The S&P 500 is one of the most coveted stock indexes in the world. Securing a place in the index is highly sought after, and it adds a semblance of credibility to a company that helps its shares attract more investor capital. The index is run and managed by S&P Global Inc. (NYSE:SPGI), an American financial services firm headquartered in New York, New York.
It’s not easy to secure a place in the S&P 500. S&P Global lists down a set of criteria that must be followed for inclusion. For instance, a non American company with a primary listing outside the U.S. cannot be a part of the S&P 500. At the same time, its market capitalization should be greater than $14.5 billion, which removes small cap stocks from consideration. Additionally, a firm that seeks to be added to the S&P 500 must be profitable, and there must be significant volume for its shares as well as adequate liquidity.
This collection of the 500 top companies in America often serves as a benchmark for the broader market as well as the economy. Thousands of investors eagerly pour over the S&P 500 index each day to try to decipher the sentiment of market participants and determine whether there is an opportunity to make a profit. Year to date in 2023 so far, the index has returned 15.46% and its performance is a reflection of investor sentiment surrounding the American economy and monetary policy. 2023 has been quite a roller coaster ride for the S&P 500 too. The index started the year at a reading of 3,824 and for the first half of 2023, it posted returns of 16.3% by closing at 4,450 points at June end. However, the index dipped to 4,117 in late October to reverse all of its gains made since late May. However, the tail end of 2024 is proving to be much better than the third quarter, as currently, the index is trading at 4,415 points to recuperate some of its losses since June.
In fact, November has been quite a month for the S&P 500. It has seen the index post eight consecutive days of daily returns to beat a two year old record. These shifts are reflective of market sentiment, which has relied on the Federal Reserve for most of the past 18 months. This sentiment is shifting during the fourth quarter, with investors believing that interest rates are likely to start coming down. This is despite the fact that Fed officials have maintained that additional interest rate hikes are not off the table, but investors believe that the economy cannot withstand any substantial increases in interest rates particularly due to their impact on the bond market. However, there are still a lot of jitters within the market, since Fed Chair Jerome Powell’s latest comments about the potential of interest rates being insufficient to bring down inflation ended up sapping the record setting rallies of the S&P 500 and other indexes. Yet, at the same time, these rallies are also indicative of the potential gains that these indexes can post if there is sufficient evidence to believe that not only are rate hikes a thing of the past but that rates will soon start to drop.
Shifting gears to focus on the individual components of the S&P 500 index, its five largest constituent firms in terms of market capitalization are Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and NVIDIA Corporation (NASDAQ:NVDA). This shows the absolute dominance of big technology firms on both the American economy and the S&P500 as well. The latest re balancing of the S&P 500 took place in October 2023 and saw two new companies, namely Hubbell Incorporated (NYSE:HUBB) and Lululemon Athletica Inc. (NASDAQ:LULU), added to the list of elite stocks. But these additions aren’t permanent though, as data from S&P Dow Jones Indices shows that since 2015, more than a third of the stocks that were part of the index have been replaced.
So, even as the S&P 500 shakes things up quite frequently, some companies, such as 3M Company (NYSE:MMM) have been a part of it for decades. We took a look at the best performing S&P 500 stocks over the past five years, with the top three performers being NVIDIA Corporation (NASDAQ:NVDA), Enphase Energy, Inc. (NASDAQ:ENPH), and Enphase Energy, Inc. (NASDAQ:ENPH).
A businessperson in a suit standing in front of a stock market board, assessing the latest financial performance.
Our Methodology
To compile our list of the top performing stocks of the S&P 500, we ranked the stocks that are part of the index by their five year share price returns.
13 Best Performing S&P 500 Stocks in the Last 5 Years
13. Old Dominion Freight Line, Inc. (NASDAQ:ODFL)
5 Year Share Price Gains: 337%
Old Dominion Freight Line, Inc. (NASDAQ:ODFL), as the name suggests, is a freight and shipping company. This leaves it vulnerable to both high fuel prices and slow economic output, both of which are the predominant features of today’s investment climate.
During Q2 2023, 25 out of the 910 hedge funds surveyed by Insider Monkey had bought and owned Old Dominion Freight Line, Inc. (NASDAQ:ODFL)’s shares. Cliff Asness’ AQR Capital Management is the largest shareholder out of these, owning 162,745 shares that are worth $60 million.
Just like Enphase Energy, Inc. (NASDAQ:ENPH), NVIDIA Corporation (NASDAQ:NVDA), and Tesla, Inc. (NASDAQ:TSLA), Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is one of the best performing S&P 500 stocks over the last five years.
12. Applied Materials, Inc. (NASDADQ:AMAT)
5 Year Share Price Gains: 325%
Applied Materials, Inc. (NASDADQ:AMAT) is a semiconductor firm that sells chip making products. The firm is currently due to report its third quarter earnings, and analysts expect a slight dip in its sales and profit due to a sluggish semiconductor industry.
By the end of 2023’s June quarter, 72 out of the 910 hedge funds profiled by Insider Monkey were the firm’s investors. Applied Materials, Inc. (NASDADQ:AMAT)’s biggest shareholder among these is David Blood and Al Gore’s Generation Investment Management due to its $1.2 billion stake.
11. Lam Research Corporation (NASDAQ:LRCX)
5 Year Share Price Gains: 363%
Lam Research Corporation (NASDAQ:LRCX) provides products and services used in semiconductor fabrication. The firm has beaten analyst EPS estimates in all four of its latest quarters, and the shares performed well in November 2023 when they gained 19% in just nine days.
Insider Monkey dug through 910 hedge fund portfolios for this year’s second quarter to discover that 69 had invested in the company. Lam Research Corporation (NASDAQ:LRCX)’s largest hedge fund investor is Ken Fisher’s Fisher Asset Management as it owns $1.8 billion worth of shares.
10. Quanta Services, Inc. (NYSE:PWR)
5 Year Share Price Gains: 405%
Quanta Services, Inc. (NYSE:PWR) is a large industrial equipment company that serves the needs of the energy and other industries. The firm’s shares are rated Strong Buy on average and analysts have set an average share price target of $222.25.
By the end of 2023’s June quarter, 41 out of the 910 hedge funds part of Insider Monkey’s database had held a stake in Quanta Services, Inc. (NYSE:PWR). William Harnisch’s Peconic Partners LLC is the biggest shareholder among these as it owns a $1 billion stake.
9. Fair Isaac Corporation (NYSE:FICO)
5 Year Share Price Gains: 419%
Fair Isaac Corporation (NYSE:FICO) is a software company that enables firms to analyze their data. It reported its fourth quarter of fiscal year 2023 earnings in November 2023, with the results showing an 11% annual growth in revenue.
Insider Monkey dug through 910 hedge funds for their shareholdings during this year’s second quarter and found that 46 were the firm’s shareholders. Out of these, the largest investor is Dev Kantesaria’s Valley Forge Capital due to its $763 million investment.
8. Eli Lilly and Company (NYSE:LLY)
5 Year Share Price Gains: 425%
Eli Lilly and Company (NYSE:LLY) is one of the biggest healthcare companies in the world. The firm scored a big win in November 2023 when European authorities approved its diabetes drug Mounjaro for weight loss treatments as well.
During Q2 2023, 87 out of the 910 hedge funds tracked by Insider Monkey had bought and owned Eli Lilly and Company (NYSE:LLY)’s shares. Ken Fisher’s Fisher Asset Management owns the biggest stake among these which is worth $1.9 billion.
7. KLA Corporation (NASDAQ:KLAC)
5 Year Share Price Gains: 451%
KLA Corporation (NASDAQ:KLAC) is another semiconductor manufacturing equipment provider. The firm was out with some great news for investors as part of its first quarter of fiscal year 2024 results in October 2023, as not only did it meet the upper end of its revenue guidance, but also marked its 14th consecutive annual dividend increase since 2006.
By the end of this year’s second quarter, 47 out of the 910 hedge funds part of Insider Monkey’s database had invested in KLA Corporation (NASDAQ:KLAC). Out of these, the biggest shareholder is Panayotis Takis Sparaggis’s Alkeon Capital Management courtesy of its $367 million stake.
6. Cadence Design Systems, Inc. (NASDAQ:CDNS)
5 Year Share Price Gains: 471%
Cadence Design Systems, Inc. (NASDAQ:CDNS) is the fourth semiconductor company on our list, illustrating the strong performance of the chip sector over the past couple of years, particularly during the aftermath of the coronavirus pandemic. To boot, its shares are rated Strong Buy on average and analysts have set an average share price target of $270.86.
68 out of the 910 hedge funds part of Insider Monkey’s Q2 2023 research had held a stake in Cadence Design Systems, Inc. (NASDAQ:CDNS). Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital owns the biggest stake among these which comes through $624 million worth of shares.
NVIDIA Corporation (NASDAQ:NVDA), Cadence Design Systems, Inc. (NASDAQ:CDNS), Tesla, Inc. (NASDAQ:TSLA), and Enphase Energy, Inc. (NASDAQ:ENPH) are some top performing S&P 500 stocks since 2018.
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Disclosure: None. 13 Best Performing S&P 500 Stocks in the Last 5 Years is originally published on Insider Monkey.
