return on the S&P 500 Index. This return means that $1,000 invested in
Philip Morris on March 1, 1957, would have accumulated to over $8.25
million by the end of 2006, nearly 50 times the $170,000 accumulation in
the S&P 500 Index.
Philip Morris’s outstanding performance does not just date from
mid-century. Philip Morris was also the best-performing company since
1925, the date when comprehensive returns on individual stocks were
first compiled. From the end of 1925 through the end of 2006, Philip Mor-
ris delivered a 17.2 percent compound annual return, 7.4 percent greater
than the market indexes. If you had invested $1,000 in this firm in 1925, it
would be worth, with dividends reinvested, almost $380 million in 2007!
Philip Morris’s bounty did not extend to only its own stockholders.
Philip Morris eventually became the owner of 10 other original S&P 500CHAPTER 4 The S&P 500 Index 59
TABLE 4–2
The 20 Best-Performing S&P 500 Firms That Have Survived Intact, 1957 through December 2006Rank 1957 Name 2007 Name1957-
2006
ReturnSector1 PHILIP MORRIS ALTRIA GROUP 19.88% Con. Staples
2 ABBOTT LABS ABBOTT LABS 15.86% HealthcareHealthcare
HealthcareHealthcareHealthcare3 CRANE CO CRANE CO 15.47% Industrials
4 MERCK MERCK 15.43%
5 BRISTOL MYERS BRISTOL-MYERS SQUIBB 15.43%
6 PEPSI-COLA CO. PEPSICO INC 15.40% Con. Staples
7 SWEETSCOOFAMER. TOOTSIEROLLINDS 15.12% Con.Staples
8 COCA-COLA CO COCA-COLA CO 15.05% Con. Staples
9 COLGATE-PALMOLIVE COLGATE-PALMOLIVE 14.99% Con. Staples
10 AMERICAN TOBACCO FORTUNE BRANDS INC 14.92% Con. Disc.
11 HJ HEINZ CO. HJ HEINZ CO 14.48% Con. Staples
12 PFIZER PFIZER INC 14.48%
13 MCGRAW-HILL BOOK CO MCGRAW-HILL COS. 14.31% Con. Disc.
14 SCHERING SCHERING-PLOUGH 14.22%
15 WM WRIGLEY WRIGLEY WM JR 14.15% Con. Staples
16 SCHLUMBERGER SCHLUMBERGER LTD 14.06% Energy
17 PROCTER & GAMBLE PROCTER & GAMBLE CO 14.05% Con. Staples
18 HERSHEY CO HERSHEY 14.02% Con. Staples
19 KROGER KROGER CO 14.01% Con. Staples
20 MELVILLE SHOE CVS CORP 13.85% Con. Staples