JohnCLeven (83.37)

5 yr avg returns on capital by sector

December 27, 2012 – Comments (2) | RELATED TICKERS: PM , KO , SBUX

“Over the long term, it's hard for a stock to earn a much better return that the business which underlies it earns. If the business earns 6% on capital over 40 years and you hold it for that 40 years, you're not going to make much different than a 6% return - even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive looking price, you'll end up with one hell of a result.” – Charles Thomas Munger

I was playing with the google finance stock screener today and gathered this data as a result. The basic takeaway arn't surprising, but it's still cool to compare across sectors.

Consumer non-cyclicals dominated both categories by a significant margin. Consumer cyclical and tech also performed well. Health did very poorly on the overall avg (probably due to too many speculative biopharmas), however, health did very well when you isolate the top quartile. Transporation and utilties did the worst.

I hope someone finds this a tad interesting. Enjoy!

5yr average return on capital % 

Consumer non-cyclical 12.3%

Consumer cyclical 8.6%

Financial 8.5%

Tech 8.4%

Basic materials 7.5%

Services 7.4%

Energy 6.8%

Capital Goods 6.4%

Transporation 6.1%

Utilties 4.8%

Healthcare 0.58%

5yr avg return on capital % (among the top quartile of each sector)

Consumer non-cyclical 32.7%

Tech 22.3%

Healthcare 20.6%

Consumer cyclical 20.2% 

Services 20.0%

Fianacial 19.8%

Basic mats 19.5%

Cap goods 15.7%

Energy 15.0%

Transporation 14.8%

Utilties 8.4%