By Philip van Doorn, MarketWatch
COVID-19 rewarded companies at the cutting edge of mobility and remote working
(Updates story with year-end closing prices.)
The pandemic year of 2020 was a surprising one for the stock market as the broad indexes crashed in March, only to roar back as unprecedented stimulus from the federal government and the Federal Reserve drove a tremendous amount of money into equities, even as the economy was reeling.
Below are lists of 2020's winners among components of the Dow Jones Industrial Average , S&P 500 and Nasdaq-100 indexes.
Honorable mentions, plus Tesla and a warning
Before going to the broad indexes, it's important to note that many of this year's highest flyers aren't part of the S&P 500 or the Nasdaq-100 Index -- or at least not yet. For the Nasdaq-100, it takes time to rebalance the index to bring the largest companies in the Nasdaq Composite Index into the smaller subset. Here's a list of 15 stocks that aren't yet included in SPX or NDX (link) but soared during 2020.
To gain entry to the S&P 500, a company's "most recent quarter's earnings and the sum of its trailing four consecutive quarters' earnings must be positive" and it must also meet other requirements (link) (link), according to S&P Global.
Tesla Inc. (TSLA) met the bill and was added to the S&P 500 on Dec. 21, after the stock had skyrocketed 731% by then. The electric-vehicle maker tops the lists, below, of the year's S&P 500 and Nasdaq-100 winners.
But Tesla's addition to the S&P 500 following five quarters of positive earnings (link) has raised what may be a red flag for some investors. In a note to clients on Dec. 24, Jefferies analyst Christopher Wood pointed out that when Tesla was added to the S&P, its market capitalization was greater than the combined stock-market values of Toyota, Volkswagen (VOW3.XE) , General Motors Co. (GM), Ford Motor Co. (F), Honda Motor Co. (7267.TO) and Nissan Motor Co. (7201.TO). Wood added that all those firms were "busy spending serious amounts of money in electric vehicles, lured by various incentives, be they subsides or fines."
Here's the kicker: Wood wrote that as far as he could tell, "Tesla only generates profits at present by selling tax credits," which are payments to Tesla by other auto manufacturers who make too few electric vehicles to satisfy regulators. Wood continued: "So in this respect, as noted in an excellent article in The Wall Street Journal in August, the irony is that Tesla is worth more than most of the industry it relies on for the subsidies that are the only reason it has been able to report five consecutive quarters of profits." (The italics are mine.)
More on Tesla and credits:Tesla plays smoke and mirrors with profits again (link)
Perhaps surprisingly, none of the high-profile FAANG stocks -- Facebook Inc. (FB), Amazon.com Inc. (AMZN), Apple Inc. (AAPL), Netflix Inc. (NFLX) and Google holding company Alphabet Inc. (GOOGL)(GOOGL) -- made the S&P 500 list of 20 best performers.
However, Amazon and Apple made the list of top 20 Nasdaq-100 performers, and Apple topped the Dow 30 components. Here's how the other FAANGs performed in 2020:
-- Facebook climbed 33%.
-- Netflix jumped 67%.
-- Alphabet's Class C shares and Class A shares gained 31%.
Best-performing S&P 500 stocks of 2020
The S&P 500 rose 16.3% in 2020. (All price changes in this article exclude dividends.) Here are the 20 components of the benchmark index that showed the biggest gains:
Company Ticker Industry Price change - 2020 Tesla Inc. US:TSLA Motor Vehicles 743% Etsy Inc. US:ETSY Miscellaneous Commercial Services 302% Nvidia Corp. US:NVDA Semiconductors 122% PayPal Holdings Inc. US:PYPL Data Processing Services 117% L Brands Inc. US:LB Apparel/Footwear Retail 105% Albemarle Corp. US:ALB Chemicals: Specialty 102% Advanced Micro Devices Inc. US:AMD Semiconductors 100% Freeport-McMoRan Inc. US:FCX Other Metals/Minerals 98% Cadence Design Systems Inc. US:CDNS Software 97% ServiceNow Inc. US:NOW Information Technology Services 95% Align Technology Inc. US:ALGN Medical Specialties 92% Idexx Laboratories Inc. US:IDXX Medical Specialties 91% Abiomed Inc. US:ABMD Medical Specialties 90% West Pharmaceutical Services Inc. US:WST Medical Specialties 88% Synopsys Inc. US:SNPS Software 86% Catalent Inc. US:CTLT Pharmaceuticals: Other 85% Apple Inc. US:AAPL Telecommunications Equipment 81% Quanta Services Inc. US:PWR Engineering & Construction 77% Rollins Inc. US:ROL Other Consumer Services 77% Amazon.com Inc. US:AMZN Internet Retail 76% Source: FactSet
Click on the tickers for more about each company, including news coverage, profiles, price ratios, ratings and charts.
The Nasdaq-100 leapt a whopping 47.6% in 2020, while the full Nasdaq Composite Index rose 43.7%. Like the S&P 500, the Nasdaq and Nasdaq-100 are weighted by market capitalization, which means big tech names have driven the indexes' strong performance.
Here are the 20 best-performing stocks of 2020 among the Nasdaq-100:
Company Ticker Industry Price change - 2020 Tesla Inc. US:TSLA Motor Vehicles 743% Moderna Inc. US:MRNA Biotechnology 434% Peloton Interactive Inc. Class A US:PTON Other Consumer Services 434% Zoom Video Communications Inc. Class A US:ZM Software 396% Pinduoduo Inc. Sponsored ADR Class A US:PDD Internet Retail 370% DocuSign Inc. US:DOCU Software 200% MercadoLibre Inc. US:MELI Internet Software/Services 193% Okta Inc. Class A US:OKTA Software 120% Nvidia Corp. US:NVDA Semiconductors 122% PayPal Holdings Inc. US:PYPL Data Processing Services 117% Advanced Micro Devices Inc. US:AMD Semiconductors 100% Cadence Design Systems Inc. US:CDNS Software 97% Atlassian Corp. PLC Class A US:TEAM Software 94% Idexx Laboratories Inc. US:IDXX Medical Specialties 91% Align Technology Inc. US:ALGN Medical Specialties 92% Apple Inc. US:AAPL Telecommunications Equipment 81% Synopsys Inc. US:SNPS Software 86% Amazon.com Inc. US:AMZN Internet Retail 76% Marvell Technology Group Ltd. US:MRVL Semiconductors 79% T-Mobile US Inc. US:TMUS Wireless Telecommunications 72% Source: FactSet
The good, old Dow
By comparison, the Dow Jones Industrial Average added a relatively paltry 7.2% in 2020. Three changes were made to the 30-stock index on Aug: 31:
-- Salesforce.com Inc. (CRM) was added, replacing Exxon Mobil Corp.(XOM)
-- Honewell International Inc. (HON) replaced Raytheon Technologies Corp. (RTX).
-- Amgen Inc. (AMGN) replaced Pfizer Inc.(PFE).
Here's how all 30 current components of the Dow performed in 2020:
Company Ticker Price change - 2020 Apple Inc. US:AAPL 81% Microsoft Corp. US:MSFT 41% Nike Inc. Class B US:NKE 40% Salesforce.com Inc. US:CRM 37% Walt Disney Co. US:DIS 25% Caterpillar Inc. US:CAT 23% Home Depot Inc. US:HD 22% Walmart Inc. US:WMT 21% Honeywell International Inc. US:HON 20% UnitedHealth Group Inc. US:UNH 19% Visa Inc. Class A US:V 16% Goldman Sachs Group Inc. US:GS 15% Procter & Gamble Co. US:PG 11% McDonald's Corp. US:MCD 9% Johnson & Johnson US:JNJ 8% Travelers Cos. Inc. US:TRV 2% Dow Inc. US:DOW 1%
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01-02-21 0817ETCopyright (c) 2021 Dow Jones & Company, Inc.