If You Invested in These 3 Value Stocks 20 Years Ago, You Would’ve Become Rich
Written by
Marc Guberti
Edited by
Zuri Anderson
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Value stocks cater to investors who want to buy reliable companies with a decent margin of safety. Instead of buying high-flying growth stocks that can crash and burn if the economy goes through a recession, value stocks can hold their ground during uncertainty.
However, buying and holding value stocks still makes it possible to become rich. Their gains may not look exciting compared to the hottest AI stocks, but if you give them time to grow, some value stocks can outperform most of the stock market.
The three stocks highlighted below demonstrate what is possible if investors accumulate value stocks in the long run.
Walmart (WMT)
The global retailer became one of the most successful stocks in the market thanks to its focus on offering affordable prices for a wide range of goods. The stock has been performing well recently, as it’s picked up a 32% gain over the past year. It also has a 0.91% yield.
Although those gains sound solid, the stock’s 958% return over the past 20 years demonstrates how much your portfolio can compound if you pick the right stocks. If you put $10,000 into Walmart stock 20 years ago, it would have turned into $105,800.
That doesn’t even include the dividend payouts, which you could have reinvested into the company. Walmart’s market cap is currently above $800 billion, so it will be hard for the company to deliver that type of return over the next 20 years. The higher a company’s market cap becomes, the more difficult it is for the stock to produce life-changing gains. However, there are examples of smaller value stocks that would have made people rich if they bought shares 20 years ago.
Home Depot (HD)
Home Depot hasn’t done as well as Walmart over the past year. It’s only up by 10% during that time, but it comes with a more generous 2.18% yield. However, if you turn the clock back by 20 years, Home Depot has been an exceptional performer.
The home improvement retailer’s shares have soared by 1,650% over the past five years. That means a $10,000 investment would have turned into $175,000. It’s a tremendous return that does not include dividends and highlights how stocks can rally over the long run.Â
However, HD stock didn’t net all of those gains in 20 years. It was actually a dead stock for quite some time, based on its 1,902% return over the past 15 years. It would have made sense to sell HD stock before the 15-year rally took shape, but investors who endured five miserable years ended up with market-beating returns.
Cintas (CTAS)
Cintas offers business equipment, supplies and uniforms to more than one million small businesses in the United States. The stock has an $80 billion market cap and offers a 0.90% yield. It’s down by 2% over the past year, but even some of the top-performing stocks need breathers every once in a while.
CTAS shares have rallied by 150% over the past five years, but those gains don’t paint the full picture of the stock’s ascent. Cintas stock is the biggest winner on this list, with a 2,675% gain for investors who bought shares 20 years ago. If you put $10,000 into the stock during that time, your money would have turned into $277,500.
Cintas has the smallest market cap of the bunch, but it has also produced the highest 20-year returns.
When looking for value stocks that can be the next big winners, look for the smaller companies that don’t receive as much publicity. Plenty of press around a stock makes it easier for the markets to price that stock efficiently. Stocks with less coverage are more prone to pricing inefficiencies, which can create attractive opportunities for long-term investors.
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