Compounders for Long-Term Wealth: Top Stocks with 15%+ Annual Returns
They grow and generate profits, reinvest, and keep expanding. These long-term performers build wealth for their shareholders through the power of compounding—almost like an eighth wonder of the world.
Albert Einstein is famously said to have called compound interest the “most powerful force in the universe” and “the eighth wonder of the world.” This financial effect has fascinated not only the inventor of the theory of relativity but also millions of savers who rely on its power to grow their wealth over time. For stock investors, the concept is equally compelling: companies with strong growth that consistently increase profits over long periods often reinvest these earnings to fuel future growth, ideally becoming a self-sustaining engine of wealth generation.
Due to the term “compound interest,” such stocks are often referred to as “compounders,” while the label “marathon stocks” also aptly describes their enduring qualities. Growth is central, frequently driven by sustainable market trends. “Market dominance is not uncommon,” says Peter Oppenheimer, an equity strategist at Goldman Sachs, describing this group of stocks. To identify these high performers, Oppenheimer developed a screening approach for the U.S. investment bank: a market capitalization above $10 billion, strong balance sheets, and double-digit operating profit margins. These characteristics align with the criteria we use in our own search for these powerful long-term performers.
Our top picks stand out for their exceptional long-term total returns. That’s why we’ve set a minimum requirement of at least a 15% annualized return over the past decade. It’s natural to think of Big Tech with this approach: companies like Microsoft and Meta, which have recently delivered impressive annualized returns, clearly have the qualities we’re looking for. However, in our broader approach, most tech stocks were filtered out due to a minimum threshold of a 1% dividend yield.