We often hear advice from investment experts telling us to invest for the long term.
However, it can be tough to see the benefits of doing so as time is needed to see the effects of such patient investing.
The best way to illustrate the importance of long-term investing is to rely on real-life examples of companies that managed to compound wealth over years, if not decades.
These growth stocks have produced solid returns for their shareholders if they had held on through the years.
Here are four US growth stocks that would have multiplied your money if you invested S$1,000 in them a decade ago.
Visa (NYSE: V)
Visa is a payment processing company that helps to connect individuals, banks, and businesses.
Through its system of debit and credit cards, consumers can make secure and convenient payments to their vendors.
An investment of S$1,000 in Visa on 1 June 2014 would have seen it multiply by 5.2 times to S$5,200 today as Visa’s share price catapulted from US$52.68 to US$273.62.
That’s not to mention the regular quarterly dividends you would receive along the way that have grown annually without fail.
Over these 10 years, you would have received US$10.965 per share in dividends, taking the total gain to 5.4 times, thereby turning your S$1,000 into S$5,400.
The great news is that Visa is still growing.
For the first six months of fiscal 2024 ending 31 March 2024, Visa’s revenue rose 9.3% year on year to US$17.4 billion.
Operating income climbed 8.5% year on year to US$11.3 billion while net profit jumped 13.2% year on year to US$9.6 billion.
The business also generated a positive free cash flow of US$7.6 billion for 1H FY2024, in line with the previous year.
Alphabet (NASDAQ: GOOGL)
Alphabet is the parent company of search engine Google, and the company also provides cloud services (Google Cloud) and owns video-sharing website YouTube.
Your S$1,000 investment in Alphabet would have grown to S$6,000 by today as the technology giant’s share price leapt from US$29.23 to US$175.09.
The search engine behemoth is still chalking up strong growth in its business with 2023’s revenue rising 9% year on year to US$307.4 billion.
Net profit for the year jumped 23% year on year to US$73.8 billion.
Alphabet’s momentum continued into 2024 with its latest first quarter (1Q 2024) results.
Revenue climbed 15% year on year to US$80.5 billion while net profit surged 57.2% year on year to US$23.7 billion.
Just last month, Alphabet released a beefed-up version of its Gemini artificial intelligence (AI) solution embedded in its famous search engine.
The company is looking forward to more growth as it incorporates AI into all aspects of its business.
Alphabet also initiated its first-ever quarterly dividend of US$0.20 per share in 1Q 2024.
Chipotle Mexican Grill (NYSE: CMG)
Chipotle Mexican Grill is a Mexican restaurant chain that owns and operates nearly 3,500 restaurants in the US and some countries in Europe as of 31 March 2024.
An investment of S$1,000 in Chipotle back in 2014 would have grown to S$5,780 today, showcasing the strong growth in the restaurant chain’s revenue and profits over the decade.
The company is still reporting healthy growth for its top and bottom lines.
For 2023, revenue increased by 14.3% year on year to US$9.9 billion with comparable store sales rising 7.9% year on year.
Operating profit climbed 34.2% year on year to US$1.6 billion while net profit improved by 36.7% year on year to US$1.2 billion.
Free cash flow jumped nearly 45% year on year to US$1.2 billion.
For 1Q 2024, revenue once again increased, this time by 14.1% year on year to US$2.7 billion.
Comparable restaurant sales improved by 7% year on year.
Chipotle’s net profit grew 23.2% year on year to US$359.3 million.
Free cash flow climbed 30% year on year to US$436.5 million and the company opened 47 new restaurants during the quarter.
Apple (NASDAQ: AAPL)
Apple should be no stranger to most, being the inventor of the iconic iPhone.
The technology company also has a portfolio of products such as the iPad, iMac, Apple Watch, and headset Vision Pro along with a slew of services and apps within its ecosystem.
An investment of S$1,000 in Apple a decade ago would have grown to S$9,200, not including the dividends received over these 10 years.
Apple paid out a total of US$7.40 in dividends from 2014 to the present.
If dividends are included, your S$1,000 would have grown to S$9,540.
The Cupertino-based company announced a mixed set of results recently for its first half of fiscal 2024 (1H FY2024) ending 30 March 2024.
Revenue dipped slightly by 0.8% year on year to US$210.3 billion but net profit rose 6.3% year on year to US$57.6 billion.
The technology giant also generated a positive free cash flow of US$37.5 billion for 1H FY2024.
Apple recently announced its foray into the AI space with the release of “Apple Intelligence”, a new AI software that will be incorporated into its devices soon.
A new operating system, iOS 18, will also have improved features that encourage customisation and productivity.
These enhancements promise to trigger a wave of replacements by customers who wish to enjoy these new features, thereby boosting Apple’s future sales.
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Disclosure: Royston Yang owns shares of Visa, Alphabet and Apple.
