The best S&P 500 stocks generating high and consistent returns

We find that, statistically, the best ten S&P 500 stocks for a 3-year investment are AOS, AAPL, NKE, VFC, IDXX, ANSS, ROST, CHD, UNP, BLL.

Investing into a portfolio of theses stocks (as opposed to one stock) improves the consistency of returns without sacrificing the median.

The median annualized return is 27% and 90% of the 3Y periods in the last 20 years generated over 16% annually.

We are using the simulator to statistically evaluate the returns of the S&P stocks and construct the portfolio of stocks featuring returns that are both high and consistent.

We are simulating all S&P 500 stocks across all 3-year periods from 2000 to 2019 and calculating the 10th, 20th and 50th percentiles of the annualized returns.

High typical returns

The 50th percentile indicates the typical return of a stock over the investment period (3Y, returns annualized).

We are primarily looking for stocks characterized by superior typical returns and are, therefore, sorting the results by 50th percentile (the median) and further characterize the consistency.

Consistency of returns

The 20th percentile equal to X% indicates that 80% of the 3Y periods generated above X%.
Similarly, the 10th percentile equal to Y% indicates that 90% generated above Y%.

We want to make sure the stock is generating some of the best returns in absolute majority of the 3Y periods (exposed to different market conditions).

Therefore, for the stock of our choice, we verify that the 10th and 20th percentile returns remain superior (and definitely not negative).

This methodology enables us to eliminate less predictable stocks that perform great on-average but become lossy occasionally (in over 10% of test periods).

Review below the results for Boston Scientific Corporation (BSX) or Alexion Pharmaceuticals (ALXN) as two examples of stocks we would like to avoid.

Simulation results

We sorted the stocks by the typical returns (50th percentile) and highlighted in green, yellow and red the top results in each percentile (50th, 20th and 10th).

Thus, for example, Apple (AAPL) has its 90th percentile return highlighted green since it is in the top 10 results for the 10th percentile return among all the S&P 500 stocks.

The statistical returns of AAPL are absolutely stellar with both median returns, 20th and 10th percentile return being in the top 10 among the S&P 500 stocks.

Whenever, a field for a stock is not highlighted, means that the respective return percentile in not in the top 30 and the stock is ,therefore, NOT of interest for us.

We find that some of the best stocks for 3Y investment are:
AOS, IRM, AAPL, NKE, VFC, IDXX, ANSS, ROST, CHD, MO, UNP, BLL, SHW, YUM, JBHT

Note: all returns are annualized (with compounding), S&P 500 stocks with less than 20Y history are excluded.


Stock symbol 50th percentile: 50% of returns higher than 20th percentile: 80% of returns higher than 10th percentile: 90% of returns higher than
MNST 34% 7% 2%
AOS 32% 18% 12%
AMZN 32% 19% 2%
BKNG 30% 11% -4%
IRM 28% 12% 5%
UNH 27% 9% -16%
ALXN 27% -6% -13%
GILD 25% -4% -7%
AAPL 25% 16% 9%
ATVI 25% 8% 3%
TSCO 25% 1% -5%
STZ 24% 0% -12%
NKE 24% 16% 13%
VFC 24% 13% 7%
OKE 24% 7% 2%
MCO 24% -3% -20%
AME 24% 8% 4%
ORLY 23% 9% 5%
IDXX 23% 13% 7%
HUM 23% 12% -9%
ANSS 22% 11% 6%
ROST 22% 12% 6%
COO 21% -3% -17%
CHD 21% 16% 13%
SBAC 21% 2% -27%
SBUX 21% 2% -13%
SPGI 21% 1% -15%
WDC 21% 1% -4%
VLO 21% -1% -29%
MTD 20% 6% 0%
ADBE 20% -4% -13%
COG 20% -2% -10%
FMC 20% 2% -9%
BWA 20% 0% -6%
MO 20% 8% 5%
UNP 19% 10% 7%
BLL 19% 10% 6%
ROK 19% 7% -5%
CMI 19% 8% 3%
SHW 19% 11% 6%
CELG 19% -3% -8%
APH 19% 9% 4%
BSX 19% -21% -26%
LMT 19% 4% -4%
NEE 18% 10% 1%
AZO 18% 8% 3%
ROP 18% 10% 2%
IT 18% 7% -2%
DVA 18% 0% -4%
FL 18% -9% -17%
ADSK 18% 1% -13%
YUM 18% 11% 9%
SPG 18% 2% -4%
MAR 18% 2% -9%
JBHT 18% 9% 6%
PRGO 18% -6% -20%
DHR 18% 12% 2%
PSA 18% 8% -1%
BLK 18% 8% 0%
NI 17% 6% 0%
DHI 17% -6% -22%
LRCX 17% -1% -11%
WEC 17% 13% 8%
CTSH 17% 6% 3%
AMT 17% 4% -4%
CI 17% -9% -15%
ETN 17% 4% -1%
CMS 17% -3% -25%
HSIC 17% 3% 0%
TMO 17% 5% 0%
FLIR 17% 2% -3%
RSG 17% 5% 2%
MCD 16% 7% 1%
EQT 16% -7% -13%
PLD 16% 5% -20%
RJF 16% 8% -3%
VRSN 16% -1% -24%
BDX 16% 5% 2%
DE 16% 4% 1%
FRT 16% 1% -3%
ALK 16% -5% -12%
RMD 16% 7% 0%
ESS 16% 8% 1%
NOC 16% 3% -4%
O 16% 9% 6%
DRI 16% 5% 0%
SRCL 16% -3% -19%
CSX 16% 7% 4%
HOLX 16% 1% -14%
HD 16% -7% -12%
SYK 16% 5% -4%
TTWO 16% -9% -16%
RRC 16% -20% -31%
CERN 16% 1% -5%
INTU 16% 3% -1%
HON 16% 0% -7%
CDNS 16% -16% -29%
LNT 16% 2% -4%
CCI 15% 3% -12%
CAT 15% 1% -4%
RTN 15% 3% -1%
ALB 15% 5% 0%
IR 15% 4% -5%
DRE 15% -5% -25%
PXD 15% 1% -4%
PVH 15% -2% -8%
MHK 15% -8% -15%
MAA 15% 8% 4%
TJX 15% 9% 6%
AON 15% 0% -7%
CB 15% 7% 2%
ARE 15% 0% -9%
TSS 15% -5% -12%
ETFC 15% -30% -56%
DLTR 15% 1% -5%
COST 15% 3% -1%
FAST 15% 2% -1%
RCL 15% -5% -15%
SIVB 15% 0% -8%
EFX 14% 1% -6%
REG 14% -2% -12%
ALL 14% -3% -16%
EMN 14% 3% -1%
PGR 14% 3% -5%
PH 14% 6% 1%
SLG 14% -4% -19%
NSC 14% 7% 4%
MAC 14% -6% -16%
EIX 14% -5% -8%
KIM 14% -11% -23%
SRE 14% 6% 1%
ECL 14% 7% 3%
FFIV 14% 0% -6%
GD 14% 2% -3%
SNA 14% 2% -1%
KMX 14% 3% -3%
LOW 14% 1% -8%
HAS 14% 7% 5%
ABC 14% 1% -3%
MKC 14% 8% 3%
UDR 14% 6% -3%
HRL 14% 7% 4%
PHM 14% -18% -30%
NVDA 14% -11% -20%
EBAY 14% -5% -12%
EA 14% -12% -29%
FISV 14% 1% -2%
ITW 14% 6% 0%
VTR 14% 2% -3%
TROW 14% 2% -1%
PKI 13% -5% -14%
FDX 13% 1% -8%
BAC 13% -19% -30%
WELL 13% 8% 5%
COP 13% -5% -9%
AKAM 13% -4% -20%
XEL 13% 2% -8%
MGM 13% -8% -41%
D 13% 5% 2%
KLAC 13% -7% -13%
VRTX 13% -2% -26%
AEE 13% -1% -14%
GWW 13% 4% -1%
WAT 13% 4% -2%
JWN 13% -7% -11%
BAX 13% 0% -9%
HSY 13% 3% -8%
SCHW 13% -8% -14%
LB 13% -12% -23%
AEP 13% -2% -5%
CVS 13% -6% -11%
MCK 13% -5% -10%
TXN 13% -8% -15%
ES 13% 4% 0%
EOG 13% 3% -1%
SWK 13% 4% 1%
PPG 13% 3% 1%
CTXS 13% -3% -8%
MMM 13% 3% 0%
DTE 13% 4% 1%
IFF 13% 4% 0%
URI 13% -8% -26%
APD 13% 7% 1%
TSN 13% 0% -5%
MCHP 12% 2% -4%
SJM 12% 5% 2%
FLS 12% -4% -8%
AFL 12% 5% 1%
VAR 12% 5% 1%
INCY 12% -12% -21%
TXT 12% -8% -25%
PCAR 12% 4% 0%
KEY 12% -9% -36%
CINF 12% 1% -10%
AVB 12% 5% -1%
PNC 12% -2% -6%
REGN 12% -11% -21%
PEG 12% 4% -1%
PNW 12% 2% -4%
HBAN 12% -13% -30%
GPC 12% 3% -1%
CLX 12% 6% 1%
MTB 12% 2% -8%
EL 12% 4% -1%
EQR 12% 5% 0%
TRV 12% 2% -2%
MRO 12% -11% -20%
SNPS 12% -4% -9%
VNO 12% 0% -7%
RF 12% -18% -36%
ADP 12% -1% -6%
GLW 12% -9% -20%
A 12% -5% -14%
EXPD 11% 1% -5%
HCP 11% 1% -3%
DIS 11% -1% -5%
UTX 11% 4% 1%
XRAY 11% 0% -4%
CHRW 11% 5% 2%
RE 11% 3% -3%
CNP 11% -1% -15%
OXY 11% 0% -4%
ADI 11% -6% -12%
RL 11% -5% -15%
SWKS 11% -10% -27%
BXP 11% 3% -3%
KSU 11% -2% -6%
PPL 11% 0% -4%
LEN 11% -6% -32%
HP 11% 2% -5%
NBL 11% -7% -16%
MSI 11% -19% -31%
USB 11% 3% -7%
DOV 11% 1% -5%
MLM 11% -2% -8%
ABT 11% 5% 2%
PBCT 11% -2% -5%
BEN 11% -5% -9%
JPM 10% -1% -5%
CVX 10% 2% -2%
MAS 10% -11% -19%
AXP 10% -5% -10%
AMG 10% -9% -14%
GIS 10% 5% 1%
PEP 10% 3% 0%
SYY 10% 0% -4%
WFC 10% 2% -4%
ORCL 10% 4% -7%
CMCSA 10% -6% -11%
NUE 10% -1% -7%
PAYX 10% -4% -7%
CAG 10% 1% -2%
ETR 10% 0% -4%
ED 10% 6% 2%
STI 9% -11% -28%
UHS 9% 2% -1%
PG 9% 3% 1%
LH 9% 3% 0%
AIV 9% -3% -20%
ZION 9% -13% -31%
K 9% 4% 1%
K 9% 4% 1%
TIF 9% -1% -5%
NTRS 9% -6% -12%
EMR 9% 1% -1%
CL 9% 3% 1%
JEC 9% -3% -7%
AJG 9% 1% -2%
LEG 9% -1% -7%
HIG 9% -8% -33%
SO 9% 5% 3%
TAP 9% 0% -4%
WHR 9% -2% -6%
LNC 9% -3% -25%
CCL 8% -3% -9%
DGX 8% 2% -1%
HPQ 8% -9% -22%
BBT 8% -2% -9%
DUK 8% -3% -12%
SYMC 8% -2% -7%
XLNX 8% -7% -11%
PCG 8% 0% -5%
QCOM 8% -4% -9%
ADM 8% -1% -5%
BBY 8% -8% -15%
JNJ 8% 3% 1%
PNR 8% -1% -4%
MSFT 8% -2% -6%
COF 8% -6% -18%
CTAS 8% -6% -10%
UNM 8% -3% -13%
M 7% -16% -24%
TGT 7% 0% -4%
MYL 7% -9% -14%
KO 7% 4% -1%
PWR 7% -11% -29%
UPS 7% 1% -3%
CSCO 7% -5% -11%
OMC 7% -1% -8%
EXC 7% -4% -10%
CPB 7% -1% -5%
NEM 7% -9% -22%
AMGN 7% -3% -8%
RHI 7% -3% -11%
VZ 7% -2% -6%
MMC 7% -8% -13%
MRK 7% -7% -11%
BK 7% -9% -13%
T 7% -5% -12%
AGN 7% -11% -16%
KMB 6% 1% -1%
NKTR 6% -17% -35%
L 6% -3% -5%
GS 6% -5% -10%
DXC 6% -6% -13%
CMA 6% -3% -13%
INTC 6% -5% -11%
HST 6% -1% -12%
AVY 6% -4% -14%
JCI 6% -22% -27%
FE 6% -4% -8%
HAL 6% -6% -15%
FCX 6% -12% -25%
SEE 6% -5% -9%
GT 5% -19% -28%
WBA 5% -6% -10%
BIIB 5% -4% -8%
NTAP 5% -9% -21%
MS 5% -16% -21%
MDT 5% -3% -8%
XOM 5% -1% -3%
HES 5% -5% -11%
AMAT 5% -9% -13%
NOV 5% -13% -17%
KR 5% -8% -10%
FITB 5% -13% -29%
WMT 4% -2% -4%
NWL 4% -12% -19%
BMY 4% -4% -18%
GE 4% -18% -23%
IP 4% -4% -8%
JNPR 4% -10% -16%
WMB 4% -14% -26%
SLB 4% -7% -12%
CAH 3% -10% -14%
DISH 3% -14% -19%
PFE 3% -8% -10%
APA 3% -11% -14%
IBM 3% -3% -7%
LUV 3% -6% -10%
MAT 3% -8% -12%
IVZ 2% -9% -21%
C 2% -25% -55%
IPG 2% -18% -26%
CTL 2% -5% -10%
LLY 2% -7% -10%
XRX 2% -9% -19%
MOS 2% -14% -18%
GPS 2% -7% -13%
BHGE 2% -7% -14%
HOG 1% -7% -19%
HRB 1% -5% -8%
AES 1% -17% -34%
KSS 0% -7% -10%
MU 0% -24% -31%
AIG -1% -16% -69%
DVN -1% -9% -13%
AMD -2% -26% -38%
ARNC -3% -15% -24%
F -3% -14% -20%

Statistical report for the 10 stock portfolio

Read as follows:
16% returns at 10th percentile mean that in 90% of the 3Y periods the stock generated 16% annually or higher

Please compare the statistics of the portfolio to that of investing into the stock of Apple Inc.

Note that the returns consistency is improved (see the 10th percentile) while we are loosing the occasional (see the 90th percentile) exceptional returns of Apple.

Statistical report for AAPL

Read as follows:
19% returns at 30th percentile mean that in 70% of the 3Y periods the stock generated 19% annually or higher

Statistical report for NKE

Read as follows:
18% returns at 30th percentile mean that in 70% of the 3Y periods the stock generated 18% annually or higher

Note that typical (i.e., median) returns of the Apple stock are close to the returns of Nike. However, the Apple stock occasionally significantly outperforms Nike.