The tech giant has delivered stellar performance for two decades and isn’t slowing down yet.
Over the past five years, Apple (AAPL 1.76%) stock has risen by 277%, adjusted for a 2020 stock split. But it’s also important to note that Apple pays a modest dividend, so assuming reinvestment of all the dividends you received over the past five years, Apple’s five-year total return through May 13 was 291%.
So, if you had invested $10,000 in Apple stock five years ago, and had reinvested your dividends along the way, your investment would have grown to about $39,100.
To put it mildly, this is extraordinary performance. A 291% total return over a five-year period translates to 31% annualized total returns. Meanwhile, the long-term average of the S&P 500 is about 10%.
Considering just the past five years, here’s how Apple’s performance compares with the major benchmarks.
Why has Apple performed so well?
Obviously, a lot of factors have contributed to Apple’s performance over the past five years — including 20 quarterly earnings reports, five holiday shopping seasons, numerous new product releases, and much more. In short, there’s far too much to cover in a relatively short article.
Having said that, comparing some of Apple’s key metrics from its most recent earnings release with the same metrics from an earnings report five years prior tells us a lot about why Apple has delivered such stellar performance.
The bottom line is that Apple has produced fantastic returns, but there are some good reasons why — not hype or explosive growth, but excellent business performance sustained over time.…Read more by Matt Frankel
