A new analysis of long-term stock performance reveals that several iconic U.S. companies have been dramatically outpaced by their international competitors over the past decades. Comparing pairs of leading American and foreign firms across major industries, the data highlights a striking trend: U.S. giants have often lagged far behind their overseas counterparts in terms of shareholder returns. While this isn’t sweeping across every industry — with giants like Nvidia (NVDA) outpacing nearly any company on the planet — it does highlight a concerning trend amongst America’s biggest names.
Long before Boeing (BA) faced the recent Air India crash — an event that sent its shares down about 4% — the company was already being outperformed by its European rival, Airbus (EADSY). From 2000 through 2020, Boeing and Airbus traded in close lockstep, but since then, their paths have diverged sharply. Boeing has struggled with production and regulatory challenges, while Airbus has surged ahead, capitalizing on global demand for commercial aircraft.
While both companies have experienced periods of growth and volatility, Airbus has decisively pulled ahead in total returns. Boeing has been plagued over the years with a number of high-profile events that make the stock difficult to invest in, despite being a global leader in a lucrative industry. Most notable was the disastrous launch of the Boeing 737 MAX, a plane that was sent out all over the world with some serious issues, which then resulted in 346 people’s deaths from 2 crashes. This event caused Boeing to lose an estimated $60 billion from fines, legal fees, order cancellations, and other costs.
While this is largely in the rear-view mirror, every subsequent incident or crash involving Boeing planes is widely publicized and heavily scrutinized, making it difficult for the stock to get ahead. The latest Air India crash is just the latest in a string of events creating uncertainty around the brand and an opportunity for its largest competitor.
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The story is similar in the industrial sector. Since October 1989, Siemens has delivered far superior returns compared to General Electric (GE). While both stocks soared during the 1990s, GE’s performance collapsed after 2000, never regaining its former highs. GE has since begun closing the gap over the past 3 years, currently amid a +500% rally from its 2022 lows after a rebrand and company restructuring. Despite this, the stock is up only 70% in the past decade, and still down 20% from its 2000 highs. GE, however, has a substantially larger market capitalization than Siemens, at $252 billion compared to Siemens’ $198 billion.
Conversely, Siemens has delivered consistent returns over those same periods. Siemens has grown 115% over the past 5 years and 133% over the past 10 years, all with a dividend yield nearly 4 times that of GE. This means Siemens stock is giving investors consistent, moderate growth with a respectable 2.2% dividend. If you managed to gain confidence and buy into GE at its recent bottom, you’d certainly be doing better in the short term.
In the automotive industry, the gap is even more dramatic. If you had bought Ford (F) stock in 1987, you’d currently be sitting on about a 7% gain on the stock. Notably, they offer an enticing dividend of approximately 5% at the $10 per share mark. But that is really all you can expect as an ROI, because Ford has been unable to stay above $10 per share for decades.
Toyota (TM), on the other hand, is up 138% since 2008 alone. The stock is currently under pressure due to the ongoing tariff policies in the United States, but it was performing well just last year. It rallied 86% from its 2023 lows to 2024 highs before pulling back. From those 2023 lows until today, the stock is still up 33%, even if investors who bought in 2024 are likely unhappy right now.
Perhaps the most striking example comes from the semiconductor sector. Since September 1994, Taiwan Semiconductor Manufacturing Company (TSM) has delivered exponential returns, currently up over 3,100% since the late ‘90s.
While Intel (INTC) saw a substantial rise in the early to mid-1990s, peaking around 2000, the company has only declined since then. Odds are, if you have invested at any time since the late ‘90s, the only ROI you’ve seen is from their very modest dividend or selling during 2021.
These examples, while selective, offer instructive illustrations of a broader dynamic. The massive earnings growth and price appreciation of a handful of big “tech” stocks have masked significant underlying weakness in the broader U.S. equity market. For investors holding broad index funds, this dispersion provides a hedge.
However, this dynamic also underscores the risks associated with long-term erosion of innovation. Today’s blue chip leaders may eventually become tomorrow’s laggards, and without new dynamic companies to take their place, the U.S. equity market — and potentially the economy — could become less attractive to investors. It could also signal the early stages of broader issues, such as those associated with the pressures of being a public company, corporate governance, and more. After all, if the public markets didn’t pressure Boeing to release the 737 MAX before it was ready, they’d be at least $60 billion richer.
As global competition intensifies, these long-term performance gaps highlight the importance of diversification and vigilance for investors, as well as the need for continued innovation to maintain U.S. market leadership.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
