These are the best five stocks of the past 10 years

Updated
Celebration fireworks
Celebration fireworks

Past performance is no guide to future results but you can still learn a lot by looking at which stocks have done well, which have done poorly, and which have thrashed the market.

The following five stocks are the current members of the FTSE 100 that have performed best over the last decade, according to research from platform AJ Bell produced exclusively for the Motley Fool. Naturally, this doesn't mean they'll perform so well over the next decade.

PaddyPower Betfair

Paddy Power, founded in 1988 by merging three Irish bookmakers, has always had an aggressive expansion strategy. The expansion continued with last year's £5bn merger to create international multi-channel betting and gaming group Paddy Power Betfair (LSE: PPB). If you'd been prescient enough to invest £5,000 in Paddy Power 10 years ago your money would now be worth £65,520. The stock has also delivered 10 successive years of dividend increases but its current yield of just 2.06% and pricey valuation of 32.75 times earnings suggest the odds of further market-thrashing growth are low.

ARM Holdings

Cambridge-based multinational semiconductor and software design company ARM Holdings(LSE: ARM) has been a ten-bagger over the last decade, turning £5,000 into a whopping £53,439. The runaway growth years seem to be over, and the stock is down 11% over the past 12 months. Recent slippage in iPhone sales, which feature its chips, have led to a rewiring of expectations. You still have to pay an ARM and a leg for the stock, which trades at more than 40 times earnings. That isn't a price I would pay.

Ashtead Group

Equipment rental firm Ashtead Group(LSE: AHT) has never been seen as one of the FTSE 100's glory boys yet it has turned £5,000 into £38,760 over the last decade, and delivered 10 years of successive dividend growth. Again, the real fun looks to be over, with the stock down 12% over the last year. Yet this could be a good entry point, as the valuation is now an undemanding 11.68 times earnings, with earnings per share (EPS) forecast to rise 6% in the year to 30 April 2017, and 9% the year after that. This still marks a continuing slowdown from its former rampant double- and triple-digit EPS growth (332%, 82%, 48%, 34% and 36%) so expect a steady rather than spectacular future.

Compass Group

Catering and support services provider Compass Group(LSE: CPG) is another unsung FTSE 100 hero, turning £5,000 into £37,795 in 10 years. Success has gone to its head, with a pricey valuation of 23.87 times earnings, and lowly 2.26% yield. Share price growth of 17% in the past year suggests it hasn't lost its bearings, and still has forward momentum on its side.

Randgold Resources Limited

Investors in precious metals miner Randgold Resources Limited(LSE: RRS) have struck gold over the last decade, with the stock turning £5,000 into £35,864. Yet it's down 47% in the last three years as the gold price trailed away following the 2011 Eurozone crisis, despite a recent revival. Randgold trades at a tempting 10.47 times earnings and may be useful as a portfolio diversifier.

Russ Mould, investment director at AJ Bell, notes that Randgold is the only one of the top five to cut its dividend three times in the last decade. It's the exception that proves the rule with a strong pattern of the best performing companies offering progressive dividends. "This goes to show how stock markets are get-rich-slow mechanisms, not-get-rich quick schemes," Mould says. That's one thing the past most definitely does tell us.

The five stocks listed in this special Motley Fool report all have a great track record of hiking their dividends year after year.

Better still, all are ideally placed to deliver long-term wealth over the years ahead, as you'll discover when you read these top FTSE 100 stocks could help you retire in comfort.

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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has recommended ARM Holdings and Paddy Power Betfair. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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