If a time machine could take you back to the early 2000s – without the urge to open a crypto wallet – what would be the No. 1 investment you make?
Perhaps Apple Inc. (Nasdaq: AAPL), which has sold 1.3 billion iPhones since 2007 and reported a profit of $19.4 billion last quarter?
Or Tesla Inc. (Nasdaq: TSLA), which grew from selling just 937 cars in 2009 to more than 300,000 last year?
Some Savvy Income Investors Might Consider Altria Group Inc. (NYSE: MO, The tobacco giant, formerly Philip Morris International Inc., has increased its dividend by 631% since 2002. This streak of dividend growth is possible when you sell an addictive product to hundreds of millions of people.
But there is one little-known company that has turned these household names to dust.
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The Unknown Stock That Beats Every Wall Street Darling
Monster Beverage Corporation (Nasdaq: mnst) is a company that has never been described as changing the world. It’s not putting an iPhone in every third person’s hand or solving climate change.
Yet this energy drink company returned 87,560% from 2000 to 2020 — enough to turn every $1 investment into $876.
Why was Monster Beverage able to dramatically outperform these world-changing companies?
Part of the reason comes from its size—Monster Beverages reported $92 million in revenue in 2002, while Apple reported $5.7 billion. A smaller company can grow revenue — and ultimately its earnings and share price — much faster than a company that’s already a giant.
But there are bigger factors at play. Apple spent $446 million on research and development in 2002 to stay ahead of its competitors and maintain its current operations. By 2022, its annual operating costs could reach $274 billion.
To keep the lights on, Apple had to spend $274 billion or the company could no longer make and sell products. In contrast, Monster Beverage spent just $4.6 billion on operating costs in 2022.
It turns out that an energy-drink business is much less capital-intensive than a tech business — and that difference, compounded over the years, means that Monster Beverage has the wherewithal to grow its business by expanding operations. There were hundreds of billions of dollars more. To claim more market share.
benefited from a similar dynamic The Coca-Cola Company (NYSE: To, If you’ve ever wondered why the ticker symbol is KO instead of CO or CC, it’s because Wall Street settled on an acronym for “knock out.” The feeling was that investing in Coca-Cola was a slam dunk because the priceless brand name commanded loyalty from hundreds of millions of people around the world. How can investors be wrong?
Certainly, $100 invested in Coca-Cola at the time of its 1919 initial public offering (IPO) would have turned into $1.25 million a century later. There are a lot of factors behind that performance, but it’s no coincidence that Coca-Cola had to pay just $24 billion in operating costs in 2020, or less than 10% of what Apple paid.
See next: For investors looking to invest in startups in the beverage space, trubrain There is also a product designed to improve energy levels and performance. It’s already profitable, but with only $17 million in sales since 2012, even smaller than Monster Beverage was at the turn of the century.
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this article You’ll Never Guess the Top-Performing Stocks of the Last 20 Years originally appeared benzinga.com
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