In this article, we discuss 12 best performing S&P 500 stocks in the last 5 years. If you want to see more stocks in this selection, check out 5 Best Performing S&P 500 Stocks in the Last 5 Years.
The S&P 500 Index is a primary stock market benchmark for the broader market. It tracks the performance of about 500 large-cap companies that trade on U.S. exchanges. Although the S&P 500 ended the last trading day of 2022 with a sharp decline on the back of high inflation, skyrocketing interest rates, and accelerating concerns of a recession, it might be a good idea to look back at the historical performance of the index and see how it has fared on average. It is very rare for the S&P 500 to report consecutive losses for years in a row, but when it does occur, historically the second year is more painful than the first. This means that equities could be in for greater pain in 2023 as compared to 2022. Investment advisory UBS mentioned in its 2023 outlook note:
"History shows that growth and earnings continue to deteriorate into market troughs before financial conditions ease materially."
2023 is a year to navigate the stock market carefully and be selective with portfolios. Bruce Helmer, co-founder of Wealth Enhancement Group, told CBS News on January 5 that although the economic uncertainty prevails, China is beginning to ease up on its COVID Zero policies, which suggests that there are reasons for optimism. JPMorgan expects the market to "re-test" the lows of 2022 in the first half of 2023, however, the stock market could rebound later in the year.
Although past performance is not a measure for future performance, some market experts are highlighting longer-term historical patterns to reassure investors that bear markets eventually come to an end. As per Commonwealth Financial Network’s 2023 forecast, citing data from JPMorgan Asset Management:
"Keep in mind also that from 1980 to the present, annual returns for the S&P 500 were positive in 32 of 42 years despite intra-year declines averaging 14 percent."
In this scenario, investors should stick with stable companies that have fortress balance sheets, a loyal customer base, widespread operations, and market visibility. These factors allow such firms to survive economic volatility better than others. While investors often look to buy solid equities at a discount (see 11 Best Buy-the-Dip Stocks To Invest In), it is a good idea to watch out for stocks which have a history of positive share price gains. These stocks are likely to have positive industry dynamics behind their backs, which are underappreciated by the market, and may continue to outperform the market. Some of the best performing S&P 500 stocks in the last five years include NVIDIA Corporation (NASDAQ:NVDA), Tesla, Inc. (NASDAQ:TSLA), and Apple Inc. (NASDAQ:AAPL).
Our Methodology
We selected the 12 S&P 500 constituents that have posted significant share price gains over the last five years as of January 6. We scanned Insider Monkey’s database of 920 hedge funds to assess the hedge fund sentiment around these equities. The list is arranged according to the share price returns of each firm.
Copyright: wolandmaster / 123RF Stock Photo
12. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 110
5-Year Share Price Gains as of January 6: 114.31%
UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified health care company in the United States. The company expects FY 2022 EPS of $20.85 to $21.05, while adjusted EPS is forecasted to be $21.85 to $22.05. The consensus EPS estimate is $22.03. UnitedHealth Group Incorporated (NYSE:UNH) said it expects 2022 revenue to be about $324 billion, compared to the consensus estimate of $323.27 billion.
On December 7, Credit Suisse analyst A.J. Rice raised the price target on UnitedHealth Group Incorporated (NYSE:UNH) to $610 from $590 and kept an Outperform rating on the shares.
According to Insider Monkey’s data, UnitedHealth Group Incorporated (NYSE:UNH) was part of 110 hedge fund portfolios at the end of Q3 2022, compared to 91 in the earlier quarter. Rajiv Jain’s GQG Partners is the biggest stakeholder of the company, with 3.2 million shares worth $1.6 billion.
Like NVIDIA Corporation (NASDAQ:NVDA), Tesla, Inc. (NASDAQ:TSLA), and Apple Inc. (NASDAQ:AAPL), UnitedHealth Group Incorporated (NYSE:UNH) is one of the best performing S&P 500 members over the last five years.
Here is what Stewart Asset Management has to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2022 investor letter:
“Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. UnitedHealth’s (NYSE:UNH) earnings were resilient. While it reported modestly down earnings in 2008, its earnings rebounded quickly to record highs in 2010 and the shares responded strongly in anticipation of this.”
11. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 73
5-Year Share Price Gains as of January 6: 122.59%
NextEra Energy, Inc. (NYSE:NEE) is a Florida-based company that transmits, distributes, and sells electric power to retail and wholesale customers in North America. The company generates electricity through wind, solar, nuclear, coal, and natural gas facilities. On October 28, NextEra Energy, Inc. (NYSE:NEE) outperformed expectations for Q3 adjusted earnings and revenues, and agreed to acquire a portfolio of landfill gas-to-electric facilities from Energy Power Partners for $1.1 billion. The company announced that it is buying nearly 30 facilities that will allow it to become a producer of renewable natural gas, which can also be utilized to create hydrogen. It is one of the best performing S&P 500 stocks to invest in.
On December 14, Wells Fargo analyst Neil Kalton raised the price target on NextEra Energy, Inc. (NYSE:NEE) to $105 from $100 to reflect greater peer group multiples since his last update, while maintaining an Overweight rating on the shares. His outlook for the sector is not as bullish for 2023, nor is he completely bearish.
According to Insider Monkey’s third quarter database, 73 hedge funds were long NextEra Energy, Inc. (NYSE:NEE), up from 59 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 9.5 million shares worth $742 million.
ClearBridge Investments made the following comment about NextEra Energy, Inc. (NYSE:NEE) in its Q3 2022 investor letter:
“NextEra Energy, Inc. (NYSE:NEE) is an integrated utility business with a regulated utility operating in Florida and the largest wind business in the U.S. NextEra’s regulated business includes Florida Power & Light, which serves nine million people in Florida. NextEra’s share price rose along with the passage of the U.S. Inflation Reduction Act, which considerably expands support for renewable energy.”
10. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 74
5-Year Share Price Gains as of January 6: 122.65%
Broadcom Inc. (NASDAQ:AVGO) is a California-based company that designs, develops, and supplies semiconductor devices worldwide. On December 8, the company declared a $4.60 per share quarterly dividend, a 12.2% increase from its prior dividend of $4.10. The dividend was paid on December 30. Broadcom Inc. (NASDAQ:AVGO) also resumed its authorized share repurchase program worth $13 billion. It is one of the best performing S&P 500 stocks in the last five years, with shares gaining nearly 123% as of January 6.
On December 14, Deutsche Bank analyst Ross Seymore raised the price target on Broadcom Inc. (NASDAQ:AVGO) to $590 from $575 and kept a Buy rating on the shares. Heading into 2023, the analyst expects semiconductor investor focus to shift to finding a "bottom in both fundamentals and share prices." He believes the latest meaningful rally in the group is premature given the potential of ongoing fundamental weakness and therefore forecasts a "superior opportunity to become more constructive to emerge later in 2023."
According to Insider Monkey’s data, Broadcom Inc. (NASDAQ:AVGO) was part of 74 hedge fund portfolios at the end of September 2022, compared to 66 in the prior quarter. Ken Griffin’s Citadel Investment Group is a prominent position holder in the company, with over 1 million shares worth $469 million.
Here is what Carillon Tower Advisers specifically said about Broadcom Inc. (NASDAQ:AVGO) in its Q2 2022 investor letter:
“Tech stocks, including Broadcom Inc. (NASDAQ:AVGO), were one of the hardest-hit sectors due to fears over a weakening macroeconomic environment. Broadcom, however, outperformed semiconductor peers as its end-market exposures provided relatively more defensive characteristics.”
9. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 146
5-Year Share Price Gains as of January 6: 126.50%
Mastercard Incorporated (NYSE:MA) is an American multinational financial technology corporation. The company offers integrated products and value-added services for account holders, merchants, financial institutions, businesses, governments, and other organizations. It is one of the best performing S&P 500 stocks in the last five years, with shares up 126.50% as of January 6.
On December 6, Mastercard Incorporated (NYSE:MA) declared a $0.57 per share quarterly dividend, a16.3% increase from its prior dividend of $0.49. The dividend is payable on February 9, to shareholders of record on January 9. Mastercard Incorporated (NYSE:MA) also announced a new stock buyback program of up to $9 billion. The new program will be effective once the company's existing $8 billion repurchase program is completed, of which $4.1 billion is remaining under the existing program as of December 1, 2022.
According to Insider Monkey’s data, 146 hedge funds were long Mastercard Incorporated (NYSE:MA) at the end of September 2022, compared to 137 funds in the last quarter. Charles Akre’s Akre Capital Management is the biggest stakeholder of the company, with 5.8 million shares worth $1.6 billion.
Here is what Stewart Asset Management has to say about Mastercard Incorporated (NYSE:MA) in its Q3 2022 investor letter:
"We invest in businesses with strong, resilient earnings growth which are less cyclical. In the pandemic recession of 2020, the aggregate earnings of the portfolios we manage did not decline year-over-year, and in fact grew, albeit modestly. Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. During this same period, Mastercard’s (NYSE:MA) earnings almost tripled."
8. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 100
5-Year Share Price Gains as of January 6: 133.31%
T-Mobile US, Inc. (NASDAQ:TMUS) is an American provider of mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. On January 4, T-Mobile US, Inc. (NASDAQ:TMUS) released preliminary results for 2022 that included strong growth in new postpaid customers. The company announced that it added 6.4 million total postpaid customers in 2022, which outperformed expectations, and also added 2 million new high speed Internet customers during the year. T-Mobile US, Inc. (NASDAQ:TMUS) is one of the best performing S&P 500 stocks over the last five years.
On January 5, T-Mobile US, Inc. (NASDAQ:TMUS) preannounced solid customer results for Q4, with improved postpaid phone performance supported by very low churn despite some gross ad weakness, JPMorgan analyst Philip Cusick told investors in a research note. T-Mobile US, Inc. (NASDAQ:TMUS) is the analyst’s best long-term idea across his coverage and favorite communications services stock. He reiterated an Overweight rating on T-Mobile US, Inc. (NASDAQ:TMUS) with a $200 price target.
According to Insider Monkey’s Q3 data, 100 hedge funds were bullish on T-Mobile US, Inc. (NASDAQ:TMUS), compared to 96 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with 5.2 million shares worth $703.3 million.
In its Q4 2021 investor letter, ClearBridge Investments shared its stance on T-Mobile US, Inc. (NASDAQ:TMUS):
“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”
7. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 269
5-Year Share Price Gains as of January 6: 151.04%
Microsoft Corporation (NASDAQ:MSFT) develops, licenses, and supports software, services, devices, and solutions worldwide. The company operates in three segments – Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. On January 4, Microsoft Corporation (NASDAQ:MSFT) announced that it is reportedly in "advanced talks" to invest at least $10 million or more into California-based autonomous driving startup Gatik. Under this deal, Gatik would use Microsoft Corporation (NASDAQ:MSFT) cloud computing platform Azure to help create autonomous delivery technology for trucks. Microsoft stock has climbed over 151% in the last five years as of January 6, making it one of the best performing S&P 500 members.
On January 4, DA Davidson analyst Gil Luria initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with a Buy rating and a $270 price target. The stock warrants a premium valuation as the company should be solid heading into a global economic downturn, the analyst told investors.
According to Insider Monkey’s data, 269 hedge funds were long Microsoft Corporation (NASDAQ:MSFT) at the end of September 2022, compared to 258 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the biggest position holder in the company, with 39.2 million shares worth $9.14 billion.
TimesSquare Capital made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2022 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) develops, licenses, and supports software solutions worldwide. Fiscal fourth quarter results were generally in line with consensus estimates, though profits missed slightly. While its Azure cloud business continues to perform well, the personal computer market has declined with inflation having an impact. Its shares experienced a -9% selloff.”
6. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 89
5-Year Share Price Gains as of January 6: 154.04%
Danaher Corporation (NYSE:DHR) is an American conglomerate that designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. The company operates through three segments – Life Sciences, Diagnostics, and Environmental & Applied Solutions. On December 6, Danaher Corporation (NYSE:DHR) declared a $0.25 per share quarterly dividend, in line with previous. The dividend is payable on January 27, to shareholders of record on December 30.
On January 5, Credit Suisse analyst Dan Leonard downgraded Danaher Corporation (NYSE:DHR) to Neutral from Outperform and trimmed the price target to $300 from $315. The analyst believes Danaher Corporation (NYSE:DHR)'s relative exposure to bioprocessing inventory reductions and diagnostics could pressure its growth relative to peers. While the analyst believes Danaher Corporation (NYSE:DHR)’s molecular diagnostics business is a long-term beneficiary from the COVID-19 pandemic, he sees "several tempering considerations."
According to Insider Monkey’s data, 89 hedge funds were long Danaher Corporation (NYSE:DHR) at the end of September 2022, compared to 82 funds in the prior quarter. Dan Loeb’s Third Point is a prominent stakeholder of the company, with 2.70 million shares worth $697.3 million.
In addition to NVIDIA Corporation (NASDAQ:NVDA), Tesla, Inc. (NASDAQ:TSLA), and Apple Inc. (NASDAQ:AAPL),Danaher Corporation (NYSE:DHR) is one of the premier S&P 500 stocks to monitor.
Here is what Stewart Asset Management has to say about Danaher Corporation (NYSE:DHR) in its Q3 2022 investor letter:
“We also need to point out one global consequence of the rapid rise in interest rates: an irrepressibly strong dollar. This hurts the reported earnings of U.S. companies who sell their goods and services overseas. Foreign currency earnings translate into fewer dollars and thus lower earnings. Most of the companies in your portfolios gain a notable amount of earnings from their international operations. While the strength or weakness of a currency doesn’t change the quality of a business or its longer-term earnings power, it can change the reported earnings of a company over short periods of time. It is difficult to forecast this effect accurately because many of our companies manufacture where they sell, which to some extent dulls the sharp negative effect of a surging dollar. Danaher (NYSE:DHR), among others, is a good example.”
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Disclosure: None.12 Best Performing S&P 500 Stocks in the Last 5 Yearsis originally published on Insider Monkey.
