Highest Return Stocks – How To Find Companies Yielding High Returns [2021]

Check this list of stocks that gave the highest return in the last 10-20 years. But what is interesting about this list is the consistency of returns yielded by these stocks. How to measure it? It is also the topic of discussion of this article. 

First, we will review this methodology, and then we will discuss the highest return stocks. Check this flowchart for the parameters and interdependencies.

Suppose an investor is holding a stock named XYZ for the past 10-Years. During this holding time, he has measured its returns (CAGR) in the following time horizons:

PeriodReturnPeriodReturn
10-Yr-15.55%1-Yr51.70%
5-Yr-12.17%3-Mon-14.16%

From the data, it is clear that in the last 1-Yr the stock has given a good return of 51.7%. But in the remaining periods, its returns are negative. How we can make meaning of such return numbers? It is confusing, right?

But suppose I express these numbers in a different way. If a score is used for the expression of its performance, it will be better. Right? Say, a score of 21 out of 100, will it make more sense. Right?

It is what is done by our stock screener. It gives GMR Scores (out of 100) to the stocks based on their past return numbers. A score of 100 is the best score, and zero is the lowest. Read more about the GMR score for high return stocks.

Suggested Reading: The Concept of Multibagger Stocks.

Highest Return Stocks in India [Updated 20-Nov-2021]

SLNamePrice (Rs.)Return (3M) %Return (1Y) %Return (5Y) %Return (10Y) %GMR Score
1Saregama India4,329.5527.99455.4685.4153.2675.58
2Globus Spirits1,218.4534.21282.4473.6427.7474.67
3Jyoti Resins804.259.24196.0657.1262.3674.47
4Page Ind.40,595.0032.6179.325.5432.0173.15
5Black Rose210.6513.1955.8654.7340.2272.5
6Ritesh Properti224.1554972.4999.3543.6872.21
7Alkyl Amines3,276.15-22.94147.5692.4768.2771.89
8Calcom Vision60.1584.51170.9573.1935.5171.83
9Kilpest India418.8-20.0610.7687.7738.6571.77
10Sagar Cements272-11.7682.1516.9625.9371.39

GMR Score For High Return Stocks

What is a GMR Score? It is an algorithm that rates stocks based on the past returns it has generated for its investors. The higher are the past returns, the better. Instead of focusing on absolute return numbers, we give scores based on the return trend.

The algorithm also considers the historical EPS growth numbers. Why use EPS Growth? There are some stocks whose price grows irrespective of their weak business fundamentals. Factoring in EPS trends will filter out such companies. It is a strong indicator of the business health of a company. A growing EPS trend is what we would like to see in our stocks.

The algorithm also includes the RoCE (Return on Capital Employed) numbers to calculate the GMR score. Like the EPS trend, a positive and growing RoCE is a strong indicator for the stock’s underlying fundamentals.

So, the GMR Score is an amalgamation of past returns, historical EPS growth, and historical RoCE.

Growth & Profitability, Yields Returns

To judge the past returns of stocks, I’ve merged the concept of growth (EPSG) and profitability (RoCE). Looking alone at the capital appreciation number is not as effective. Why? A profitable business whose earnings are also growing is most poised to see future price appreciation.

Likewise, a stock with low profitability and negative profits cannot continue to grow its share price in times to come.

Hence it is essential to see growth and profitability together to judge the quality of the highest return stocks.

Conclusion

highest return stocks - FLowchart

As an investor, we must also realize the factors that make a business profitable. A profitable business, as a result, will grow fast and will yield higher returns. The most fundamental thing about any business is its business model and its management team. Once these two factors are in place, the next-essential thing about the company is capital.

These three ingredients are the basics of any company. Together it gives quality to a business. Two fundamental indicators highlighting the quality of a company are its profitability and growth numbers.

All factors that include the business model, management’s quality, capital structure, profitability, and growth ensure future price appreciation of a stock.

So, in our endeavor to find a high return share, looking only at the price is insufficient. Why? Because business fundamentals drive a stock price high or low. How to measure the business fundamentals of a company? It is what you’ve read above in this article.

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Hi. I’m Mani, I’m an Engineering graduate who in pursuit of financial independence, has converted into a full time blogger. After working in the corporate world for almost 16+ years, I bid it adieu....read more

38 thoughts on “Highest Return Stocks – How To Find Companies Yielding High Returns [2021]”

  1. Hi,
    Sir, I am Veeraragavan, (Male – 46 years Old – from chennai.)
    I want to invest 1 lakh for 15 years. Pls suggest me, which stock will give good return for me.
    Pls Suggest me.
    Mobile No:9543664207

  2. Arminder Girgla

    This calculation is flawed. The share price calculation does not include share splits, bonus and dividends. TCS had 2-3 1:1 bonus in last 10 years and dividends are good too, which is not kept in mind while calculating returns.

  3. Hello Sir, I have your analysis sheet and subscription
    Do you think overall returns should be only major criteria for stock selection? we all are interested only in returns , so we should selected stocks only basis of returns ? right ? why so many ratios and other params need to check, this should be only criteria ?
    I created one query on scrnner as below, do you think seleciton should be only on this query from Nifty 100 stocks , i am excluding penny stocks , only Nifty 500 from below query sorted on market cap
    Return over 1month > 3 AND
    Return over 3months > 10 AND
    Return over 6months > 15 AND
    Return over 1year > 20 AND
    Return over 3years >15 AND
    Return over 5years > 10

    1. Returns that we see are past performances. The study of ratios can help us to judge the fundamentals of the business. If the fundamentals are good, the future will also be good.

  4. Thank you for this article as it gives good understanding on returns in multiple companies spread over different sectors.

    I guess however the compounded average returns across year is better metric than simple average of individual returns.

  5. Boss, away some articles. Since yesterday spent time in reading articles with rich info.
    Thanks for the same.
    New to market and this gives some basic idea and confidence to invest and gives some direction.

  6. One error in your calculation. The three month return should be annualized before taking average. Nice post. Thanks

      1. Sir can i go for adani enter ,transmission, and green for long time as i assume them as a multibagger in comng time

    1. Hi Mani, Another nice article. I also suggest that you review the concept of CAGR which i believe is a much better parameter and indeed an essential one. See the below for a quick example :
      year Value Annual % @6.55%
      0 100,000
      1 140,000 40.00 106,548
      2 112,000 -20.00 113,526
      3 120,960 8.00 120,960
      Average Return 9.33
      CAGR 6.55%

      In the example the stock’s average return is 9.33% which seems better than a fixed deposit.
      But in reality, an investor would have been better off investing in a risk free post office TD @6.9% and would have got better returns.

      CAGR considers the annual capital addition on account of returns indirectly and is therefore a better measure to compare the returns as in the above example.

      Regards
      Sid

      1. Significance of Overall Return of Vinati.
        This is a nice article. I thought i will replicate your Vinati Example. However your article has no date and which stock prices u have taken cannot be known. Hence your annualized % cannot be determined.
        Can u pl 1) Let me know Vinati stock prices that u had considered for this article or 2) Pl explain how have u calculated annualized return?

      2. Thanks for sharing the post. The way you narrated the post is good and understanding. After reading this post I learned some new things about Indian stocks. Please let me know for the upcoming posts.

      3. Sir,
        Your website is very informative. But changing layout frequently annoy very much. Please do something for this.

      4. I came across your blog and your analysis is really informative.
        I am wondering is there any way to identify such stocks in initial stages like within 3 years time span. anyone who has invested on these stocks around 2011 would have made great money.
        Is there any common characteristics between them in early stages ?

        1. Thanks for your comment.
          Identification of such growth stocks is not easy. There are several limitation with we common men. The biggest is “lack of data base”. What we have, is websites like moneycontrol, Enonomic Times etc which provides with fair-enough info. So what we can do? One way to do it is to keep track of its Profits as explained in this blog post. Potential such stocks with have a low PEG ratio.

          1. Thanks for the reply. Going through all your blogs one by one and appreciate your efforts to explain complex things in such a way that it becomes easy to understand and keeps user’s interest intact.
            Just curious about , what your stock analysis tool is suggesting if we feed 2008 – 2011/2012 data of these stocks. Planning to buy it and bit curious what it has to say for such scenarios.
            Thanks in Advance 🙂

            1. Hello, Thanks for posting your comment. The worksheet tries to estimate the “intrinsic value” of stocks. To know more about it, you can check the product page please.

          2. Hello Sir,

            I have a question. As you have said “Hindustan Unilever Ltd. – 19.27% CAGR-10Y”, is this return as mentioned here do we get each year i.e., 1st year, 2nd till 10th?

            Thank you

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