The 50 Most Profitable Stocks Based on Annual Earnings in the S&P 500 Index from 1980 to 2023
Top S&P 500 stocks by annual return
The average annual return of the S&P 500 was 10% from 1980 to 2022, excluding dividends. Of course, there are companies that bring in much higher profits in any given year.
In this chart, using data from the S&P Dow Jones Indices, we explore the top S&P 500 stocks with the best single-year returns in the past four decades.
Top S&P 500 Stock Ranking
To find the top performers, the S&P selected the top 10 top-performing stocks each year and then narrowed that list down to the top 50 overall. They ranked the best stocks in the S&P 500 by performance, meaning that dividends or share distributions weren't taken into account.
The best results came in a few select years, including the dot-com boom in 1999, the stock market rally in 2003, and the recovery from the global financial crisis in 2009.
Qualcomm has certainly been the leader in any calendar year window. The company held key patents for code division multiple access (CDMA) technology, which provided fast wireless Internet access and became the basis for 3G networks.
Its stock skyrocketed in 1999 when it divested from less profitable lines of business, resolved a patent dispute with competitor Ericsson, and joined the S&P 500. At the time, CNN reported that one lucky investor who heard about Qualcomm from an investment banker turned rabbi , earned $17 million - roughly $30 million in today's dollars.
The latest stocks to make the rankings are from 2020: the well-known Tesla (No. 2) and the lesser-known online marketplace Etsy (No. 17), whose sales from independent contributors skyrocketed during the early COVID-19 pandemic. The dollar value of items sold on Etsy has more than doubled from $5.3 billion in 2019 to $10.3 billion in 2020, with mask sales accounting for 7% of the total.
Biggest win in each sector
While information technology stocks make up almost half of the list, nine of the 11 sectors of the S&P 500 are represented. No company in the manufacturing or consumer goods sectors ranked among the top S&P 500 stocks in terms of annual returns.
Below we show the stocks with the best annual returns for each sector.
Tesla was the highest-grossing consumer discretionary stock on the list. On December 21, 2020, it entered the S&P 500 index after meeting the requirement for positive earnings for four straight quarters. The company's performance was helped by its announcement of its inclusion in the S&P 500, as well as strong performance in China and the general hype around electric vehicles as environmental regulations tighten around the world. .
In the field of communications services, DSC Communications achieved significant success in 1992. The telecommunications equipment company had contracts with big companies like Bell and Motorola. Alcatel-Lucent (then Alcatel), a French mobile phone manufacturer, acquired DSC Communications in 1998.
Serial Success Stories
It's impressive to be on the S&P 500 top stocks by calendar returns once, but there are seven companies that have done it twice.
Some stocks have repeatedly shown their best results, for example, Dell rose in the rankings in a row in 1997 and 1998.
On the other hand, the chosen ones have more stamina. Computing giant NVIDIA topped the charts in 2001 and won again 15 years later in 2016. And this year could be another win as the company recently hit a $1 trillion market cap and has the highest annual return in the S&P 500 as of July 6, 2023.