Investing isn't easy. Even Warren Buffett counsels that most investors should invest in a low-cost index like the S&P 500. He says that way "you'll be buying into a wonderful industry, which in effect is all of American industry."
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 index.
Step on up, National Fuel Gas (NYS: NFG) .
National Fuel Gas shares have easily outperformed the S&P 500 over the last three decades:
Source: S&P Capital IQ.
Since 1980, shares have returned an average of 14.8% a year, compared with 11.1% a year for the S&P (both include dividends). That difference adds up fast. One thousand dollars invested in the S&P in 1980 would be worth $29,400 today. In National Fuel Gas, it'd be worth $83,400.
Dividends accounted for a lot of those gains. Compounded since 1980, dividends have made up about 80% of National Fuel Gas' total returns. For the S&P, dividends account for 41.5% of total returns.
Now have a look at how National Fuel Gas earnings compare with S&P 500 earnings:
Source: S&P Capital IQ.
Decent outperformance. Since 1995, earnings per share have grown by an average of 6.8% a year, compared with 6% annual growth for the broader index.
What's that meant for valuations? National Fuel Gas has traded for an average of 16 times earnings since 1980 -- quite a bit lower than the 21 times earnings of the broader S&P 500.
Through it all, shares have been strong outperformers over the last three decades.
Of course, the important question is whether that will continue. That's where you come in. Our CAPS community currently ranks National Fuel Gas with a five-star rating (out of five). Do you disagree? Leave your thoughts in the comment section below, or add National Fuel Gas to My Watchlist.
The article Stocks for the Long Run: National Fuel Gas 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.
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