• Print
  • Default text size A
  • Larger text size A
  • Largest text size A
close

Links provided by Fidelity Brokerage Services

fidelity-fbs-iconThese links are provided by Fidelity Brokerage Services LLC ("FBS") for educational and informational purposes only. FBS is responsible for the information contained in the links. FICS and FBS are seperate but affiliated companies and FICS is not involved in the preparation or selection of these links, nor does it explicitly or implicitly endorse or approve information contained in the links.
close

Published by Fidelity Interactive Content Services

Content for this page, unless otherwise indicated with a Fidelity pyramid logo, is published or selected by Fidelity Interactive Content Services LLC ("FICS"), a Fidelity company with main offices in New York, New York. All Web pages that are published by FICS will contain this legend. FICS was established to present users with objective news, information, data and guidance on personal finance topics drawn from a diverse collection of sources including affiliated and non-affiliated financial services publications and FICS-created content. Content selected and published by FICS drawn from affiliated Fidelity companies is labeled as such. FICS selected content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by any Fidelity entity or any third-party. Quotes are delayed unless otherwise noted. FICS is owned by FMR LLC and is an affiliate of Fidelity Brokerage Services LLC. Terms of use for Third-Party Content and Research.

5 century-old companies with shocking stock returns

These have outperformed the broader market many times over.

  • By Philip van Doorn,
  • MarketWatch
  • – 04/30/2014
  • Facebook.
  • Twitter.
  • LinkedIn.
  • Google Plus
  • Print

Not everybody’s a day trader.

But most financial news outlets keep covering the same companies over and over, prompting investors to focus on the short term. However, it pays, literally, to stray from the beaten path.

And, from what we've just learned, old companies — really old companies — can beat the darlings of today. So we're going in the opposite direction of investing-news agendas and looking at companies that have been around for at least 100 years.

Focus on investing

More on investing strategies and ways to help manage your portfolio.

Some readers who provided feedback on our list of 5 dividend stocks with 10-year returns of up to 569% pointed out, tongue in cheek, that it would have been more useful if we had published the story 10 years ago. But the important part was making a link between consistent dividend increases and strong long-term performance. Plus, we highlighted companies that many investors may not have heard about.

For today's deep dive, we identified 448 U.S. companies founded at least a century ago that are publicly traded today, using information provided by FactSet. Among the group, 294 have been publicly traded for at least 20 years. The list excludes some old companies, including Bank of New York Mellon Corp. (BK). Bank of New York itself was founded in 1784; however, the current company was formed through a merger in 2007, and therefore is quite different than it has been in the past.

Among the 294 "old-timers," 133, or 45%, have achieved total returns, with reinvested dividends, exceeding the 505% total return of the S&P 500 Index (.SPX) through Friday's market close. We looked at 20-year total returns because that takes us back before the Internet bubble of the late 1990s that burst in 2000 and 2001, as well as the real estate bubble that was popped in 2008.

So here are the five stocks of U.S. companies that are more than 100 years old, with average daily trading volume of at least 45,000 shares, with the best total returns over two decades:

Best 20-year total returns for old-timers

Company Ticker Total Return
12 Months
Total Return
10 Years
Total Return
20 Years
Middleby Corp. MIDD 67% 958% 14,784%
Kansas City Southern KSU -7% 608% 11,662%
Actuant Corp. ATU 10% 86% 3,914%
ONEOK Inc. OKE 43% 834% 3,405%
Badger Meter Inc. BMI 14% 445% 3,037%

Total Return: Assumes dividends are reinvested. Source: FactSet, based on closing prices on April 25, 2014

This approach excludes familiar high-flyers saturated in the media, of course. Apple Inc. (AAPL), for example, has achieved a 20-year total return of 8,254%, but it was founded only in 1976.

Four of the five names on the list have even beaten the S&P 500's 10- and five-year total returns. Here's a look at a diverse group of old-timers that have served their loyal long-term shareholders so well:

Middleby Corp.

Middleby Corp. (MIDD) of Elgin, Ill., manufactures equipment used in commercial and institutional kitchens, and also sells residential kitchen equipment, distributed through dozens of brands, including Pitco Frialator. The company was founded in 1888.

Middleby's stock has returned an astounding 14,784% over the past 20 years. Even over five years, a time period that isn't listed as an item in the accompanying chart, Middleby has surged 472%, soundly beating the S&P 500's 139% return.

Following an 87% gain during 2013, Middleby's stock is up 5% this year through Friday's close at $252.61. The shares trade for 22 times the consensus 2015 earnings estimate of $11.59, among analysts polled by FactSet. That may seem like a high valuation, but it's a growth company, after all.

Middleby reported fourth-quarter earnings of $49.9 million, or $2.62 a share, increasing from $37.8 million, or $2.03, a year earlier. Sales rose 29% to $377.4 million. Even if three major acquisitions are excluded, the company's sales grew 13% last year.

Kansas City Southern

Kansas City Southern (KSU) operates three railroads, including Kansas City Southern Railway, Kansas City Southern de Mexico and the Panama Canal Railway Co.

The company was founded in 1887, making it the oldest on our list. The stock has returned 11,662% over 20 years.

Kansas City Southern's stock closed at 99.27 Friday, down 20% this year, following a 50% return in 2013. The stock was hammered in February when the lower house of Mexico's congress approved a bill that would open up competition by giving other companies access to exclusively controlled railroads. This issue is still in play, as company officials earlier this month said they expected Mexico's Senate to modify the new law, but it is clearly a major risk for the company, which draws roughly half its revenue from Mexico.

The company reported a 10% increase in first-quarter revenue to $607.4 million, but lease termination costs of $19.9 led to a 10% a decline in net income available to common shareholders to $93.6 million. EPS came in at 85 cents, down from 94 cents a year earlier.

The stock closed Friday at $99.27 and traded for 18 times the consensus 2015 EPS estimate of $5.42. The consensus 2014 EPS estimate is $4.67.

Actuant Corp.

Actuant Corp. (ATU) of Menomonee Falls, Wis., makes industrial tools and hydraulic equipment, production-automation equipment and concrete-stressing products, and also provides technical products and services to the energy industry.

The company was founded in 1910, making it the youngest on this list. The stock has returned 3,914% over 20 years, though the gains dwindled to only 86% over 10 years.

The stock closed at $33.81 Friday, down 8% this year, following a 31% advance during 2013. The shares trade for 14.7 times the consensus 2015 EPS estimate of $2.30. That's the lowest forward price-to-earnings ratio among the companies listed here. The consensus 2014 EPS estimate is $1.98.

For its fiscal second quarter ended Feb. 28, Actuant reported a 9% increase in sales to $327.8 million. Net earnings rose 46% to $41.4 million. However, that included $19.1 million in earnings from discontinued operations. The company recorded a large gain on the sale of its electrical business.

Actuant provided guidance for the third quarter, predicting EPS would range from 60 to 65 cents.

ONEOK Inc.

ONEOK Inc. (OKE) of Tulsa, Okla., gathers, transports, stores and treats natural gas in the U.S. The company was formed in 1906.

The stock has soared 3,405% over 20 years. The shares closed at $62.69 Friday, returning 16% this year, following a 50% advance in 2013. ONEOK on April 17 increased its quarterly dividend by 40% to 56 cents a share, for a yield of 3.57%.

The company's revenue rose 16% during 2013 to $14.6 billion, but its operating income was down 16% to 926.7 million, reflecting, in part, costs associated with the separation of a natural gas distribution business into One Gas Inc. (OGS).

Net income attributable to common shareholders for 2013 was $266.5 million, or $1.27 a share, which included charges of $87.2 million, or 42 cents, for the winding down of One Gas and other items.

ONEOK affirmed its previous guidance, saying 2014 cash flow available for dividends would range from $560 million to $640 million.

The stock trades for 31 times the consensus 2015 EPS estimate of $2.02. The consensus 2014 EPS estimate is $1.67.

Badger Meter

Last on our list of 100-plus-year-old actively traded companies with the best 20-year total returns is Badger Meter Inc. (BMI) of Milwaukee. The company makes and sells flow-measurement and control equipment worldwide.

Badger Meter's stock has jumped 3,037% over 20 years. The stock closed at $50.53 Friday, down 7% this year, following a 17% return in 2013. The shares trade for 21 times the consensus 2015 EPS estimate of $2.41. The consensus 2014 EPS estimate is $2.10.

The company reported a 16% increase in first-quarter sales to $83.5 million. Net earnings came in at $4.6 million, or 32 cents a share, rising from $2.9 million, or 20 cents, a year earlier. CEO Richard Meeusen, in the company's earnings release, described the year-earlier period as "unusually weak."

  • Facebook.
  • Twitter.
  • LinkedIn.
  • Google Plus
  • Print
Copyright © 2014 Dow Jones & Company, Inc. All Rights Reserved.
Votes are submitted voluntarily by individuals and reflect their own opinion of the article's helpfulness. A percentage value for helpfulness will display once a sufficient number of votes have been submitted.
Content for this page, unless otherwise indicated with a Fidelity pyramid logo, is published or selected by Fidelity Interactive Content Services LLC ("FICS"), a Fidelity company with main offices in New York, New York. All Web pages that are published by FICS will contain this legend. FICS was established to present users with objective news, information, data and guidance on personal finance topics drawn from a diverse collection of sources including affiliated and non-affiliated financial services publications and FICS-created content. Content selected and published by FICS drawn from affiliated Fidelity companies is labeled as such. FICS selected content is not intended to provide tax, legal, insurance or investment advice and should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by any Fidelity entity or any third-party. Quotes are delayed unless otherwise noted. FICS is owned by FMR LLC and is an affiliate of Fidelity Brokerage Services LLC. Terms of use for Third-Party Content and Research.
fidelity-fbs-iconThese links are provided by Fidelity Brokerage Services LLC ("FBS") for educational and informational purposes only. FBS is responsible for the information contained in the links. FICS and FBS are seperate but affiliated companies and FICS is not involved in the preparation or selection of these links, nor does it explicitly or implicitly endorse or approve information contained in the links.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information.  Read it carefully.