THE DECADE IN REVIEW: Patrick Industries is best performing stock of decade
Indiana-based company sees its market cap surge from $22.3m to $1.2bn and share price rise from $1.168 to $52.04
A firm which manufactures building products for recreational vehicles (RVs) and mobile homes has outdone the likes of Netflix and Amazon to be the best performing S&P 1500 stock of the decade.
Patrick Industries (PATK) has seen its market cap surge from $22.3m at the start of 2010 to $1.2bn at the end of 2019. Furthermore its share price currently stands at $52.04 a share, having begun the 2010s at $1.1618.
This gain of more than 4,600 per cent far outdoes the 3,909 per cent rise of its closest competitor Netflix and the 3,382 per cent growth of third-placed Domino’s Pizza.
In the early 21st century as human society becomes ever more integrated with the latest technology one might have assumed that one of the FAANGs would have topped this decade’s growth leader board.
Whereas the likes of Facebook, Apple, Amazon, Netflix and Google came to prominence and dominance by revolutionising how we consume products, information and media, Patrick Industries has relied on simpler strategies.
It has not revolutionised the cabinet or the countertop but has instead produced mass-market products at competitive prices. The growth engendered has enabled it to branch and develop a vast variety of products; from hardwood furniture to fuel tanks, air conditioning products to lighting and boat components.
The company’s workforce has similarly expanded, growing from 700 to 8,000 employees between 2010 and the end 2019.
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Those who invested in the company a decade ago, or even earlier when it was founded in 1959, now feel their commitment has paid off. Indeed, when declaring a fourth quarter cash dividend of $0.25 per share of common stock this month, Andy Nemeth, president of Patrick, said, "Our ability to generate strong and consistent cash flows, coupled with our solid financial position, allows us to reward our loyal and supportive shareholders with a quarterly dividend in addition to driving execution on the balance of our capital allocation strategy.”
As impressive as its decade’s gain, Patrick could have rounded off even better. Its all-time share price occurred in January 2018 when it closed at $71.40 a share. This fall could indicate that Patrick’s growth might not continue at the same pace in the next decade.
Furthermore, while it has diversified greatly, Patrick’s base industry of RVs and mobile homes does suffer from cyclical depressions. The much-talked-about looming global economic slowdown could therefore put further pressure on the company’s share price.
FURTHER READING: Forbes Names 10 Best-Performing stocks of 2019
FURTHER READING: Market predictions: will 2020 bring riches or a recession?