'Monster' of a Stock: Beverage Firm Tops S&P 500 For Past Quarter Century

The U.S. stock market's biggest winners of the past quarter century include industrial titans, societal game changers, and inventors of technological marvels.

For investors, though, nothing has offered more juice than a simple, caffeine-charged fuel source for a generation of teens, travelers, and tired parents.

Monster Beverage Corp. (MNST), founded as an unassuming maker of juice products during the Great Depression, tops the list of all 338 continuously traded public companies within the S&P 500 Index from Jan. 1, 1998, through Dec. 31, 2022.

A few things happened during that time—a technology bubble, an ensuing recession triggered by unspeakable tragedy, a torrid housing boom, a global financial meltdown, a decade-long rally, the worst worldwide pandemic in a century, and more recently, the biggest inflation shock in 40 years.

Through it all, Monster carried on with an average annualized return of 37.1%. Its cumulative return in that time means that a $10 investment made on New Year's Day 1998 would have been worth $26,888.24 on New Year's Eve 2022.

That's better than No. 2 Apple Inc. (AAPL), inventor of something called the iPhone, and No. 3 Amazon (AMZN), which probably delivered an item or three to your residence this week.

Those two giants registered average annualized returns of 33.2% and 26.2%, respectively. Though impressive, that would "only" have produced respective 25-year returns of $13,008.59 and $3,346.07 on the same $10 investment.

Monster's March

Oddly, the S&P 500 leader's namesake money-maker, Monster Energy Drink, isn't even the market leader in its own product category. That title belongs to Red Bull.

But the company first known as Hansen Juices, when it sprang to life in 1935 in Corona, Calif., used Monster Energy's 2002 launch as a springboard to its outsized success.

The company, by then known as Hansen Natural Corp., went public in 1990 yet still had just $54 million in annual revenue when its market-leading, 25-year run started eight years later. Today, it has annual revenue more than 100 times greater and a market value 1,000 times greater than that.

Hard to Lose

Monster, Apple, Amazon, and Tractor Supply Corp. (TSCO) ranked as the Index's only stocks in the 25-year period averaging more than 25% in annualized returns.

But 181 of the 338 stocks, so just a little over half of the stocks, in that time frame had annualized returns of 10% or more. Just 45 had annualized returns lower than 5%, and only seven lost value. American International Group (AIG) performed the worst, averaging an 8.5% annualized loss, almost twice as bad as second-worst Citigroup (C), which fell an annualized 4.7%.

Just how broadly were the index's returns dispersed? Only 21 of 338 failed to at least double in value during the 25 years, whereas 77% watched their values increase fivefold or more.

Simply put, most stocks marched inexorably higher despite three full-blown bear markets in which the index plunged 49%, 57%, and 34%.

Despite those downturns, the index itself gained an average of 7.6% annually during the 25-year stretch—a cumulative return of 530%.

Even subtracting out the detrimental impact of inflation on investment returns, the index still returned an average of 5.1% annually during the period—meaning a continuous stake in the broad index would have posted a real gain of 3.5 times the original investment.