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The top ten ASX 200 stocks over the past decade

The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has dropped 9.3% since July 11, 2007, when it was at 6,325.13 points according to Standard & Poor’s. It’s currently at 5,739.10. The ASX 200 total return index over the same period is up 41% with dividends reinvested.

However, many stocks in the index have delivered monster returns over the same 10-year period. Here’s a look at the top ten, according to data from S&P Capital IQ.

Company Price return Divs reinvested Annualised
Northern Star Resources Limited (ASX: NST) 3685% 5444% 281%
Domino’s Pizza Enterprises Limited (ASX: DMP) 1537% 2167% 183%
Sandfire Resources NL (ASX: SFR) 1475% 1686% 161%
Magellan Financial Group (ASX: MFG) 1203% 1449% 149%
Webjet Limited (ASX: WEB) 835% 1271% 139%
REA Group Limited (ASX: REA) 989% 1145% 132%
Altium Limited (ASX: ALU) 686% 1071% 127%
TPG Telecom Limited (ASX: TPM) 635% 875% 114%
Ramsay Health Care Limited (ASX: RHC) 543% 724% 102%
Blackmores Limited (ASX: BKL) 366% 608% 92%
Technology One Limited (ASX: TNE) 383% 603% 92%

Source: S&P Global Markets Intelligence

The results illustrate how important dividends can be to an investor’s overall returns.

The other lesson from the data is about the power of compounding that long-term performance brings. Investors would also notice that none of the Top 20 stocks by market cap are in the list – which shows how hard it is for larger companies to outperform the market significantly.

Had you held Sandfire Resources for just 12 months from July 11, 2007, to July 2008, you would’ve seen the share price fall 30%, while the market dropped more than 20%.

Foolish takeaway

The path to successful investing involves buying into high quality companies, holding for long periods and reinvesting on a regular basis back into the market.

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Motley Fool contributor Mike King owns shares of Altium and TPG Telecom Limited. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia owns shares of Altium and TPG Telecom Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.