Stocks for the Long Run: Harris vs. the S&P 500

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Investing isn't easy. Even Warren Buffett counsels that most investors should invest in a low-cost index like the S&P 500. That way, "you'll be buying into a wonderful industry, which in effect is all of American industry," he says.

But there are, of course, companies whose long-term fortunes differ substantially from the index. In this series, we look at how individual stocks have performed against the broad S&P 500. 

Step on up, Harris (NYS: HRS) .


Harris shares have roughly matched the S&P 500 over the last quarter-century:

Source: S&P Capital IQ.

Since 1987, shares have returned an average of 9.9% per year, compared with 9.7% a year for the S&P (both include dividends). One thousand dollars invested in the S&P in 1987 would be worth $19,200 today, and, naturally, about the same in Harris.

Dividends accounted for a lot of those gains. Compounded since 1987, dividends have made up 56% of Harris's total returns. For the S&P, dividends account for 39% of total returns.

Now have a look at how Harris earnings compare with S&P 500 earnings:

Source: S&P Capital IQ.

Decent outperformance. Since 1995, earnings per share have increased by an average of 9.6% per year, compared with 6% annual growth for the broader index.

What's that meant for valuations? Harris has traded for an average of 23 times earnings since 1987 -- close to the 24 times earnings of the broader S&P 500.

Through it all, shares have been fairly average performers over the last quarter-century.  

Of course, the important question is whether that will continue. That's where you come in. Our CAPS community currently ranks Harris with a five-star rating (out of five). Care to disagree? Leave your thoughts in the comment section below, or add Harris to My Watchlist.

The article Stocks for the Long Run: Harris vs. the S&P 500 originally appeared on Fool.com.

Fool contributorMorgan Houseldoesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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