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How many individual stocks met or exceeded the performance of the best ETFs and mutual funds over the 10 years and 10 months from the beginning of 2001 through October 31, 2011? The answer is four -- only four.

They are:

  • Healthcare Services Group (NASDAQ:HCSG)
  • Plains All American Pipelines (NYSE:PAA)
  • Ventas (NYSE:VTR)
  • Magellan Midstream (NYSE:MMP)

The measure they exceeded was to have an equal or higher total return in each of the calendar year periods from 2001 forward than the median total return of all equity ETFs and no-load equity mutual funds that were in existence over the entire period.

click images to enlarge

Those four stocks clobbered the S&P 500 (proxy SPY) and and all four have a higher yield than the aggregate bond index.

These stocks, however, are showing some signs of extended valuation.

We like the idea of owning companies that do what they do, but we also prefer more favorable valuation.

PAA is viewed by analysts as having the best prospects among the four, and it may, but we would prefer not to have a 3.5x PEG.

On the 0 to 10 Thompson Reuters StarMine rating system (10 being most bullish and 0 being most bearish), here is how those four stocks are rated:

  • HCSG: 4.0
  • PAA: 9.6
  • VTR: 0.5
  • MMP: 5.9

Healthcare Services is basically a laundry service and dietary service for healthcare facilities. Ventas is a healthcare real estate investment trust. Plains All American and Magellan Midstream are pipeline limited partnerships.

Disclosure: QVM does not have positions in any mentioned security as of the creation date of this article (November 27, 2011).

Disclaimer: This article provides opinions and information, but does not contain recommendations or personal investment advice to any specific person for any particular purpose. Do your own research or obtain suitable personal advice. You are responsible for your own investment decisions. This article is presented subject to our full disclaimer found on the QVM site available here.

Source: 4 Stocks That Outperformed The Best Investment Funds For Each Calendar Year From 2001