Why WD-40 Always Beats The Market

WD-40. This company makes blue cans of lubricant. Nothing fancy. Yet, it has consistently beaten the S&P 500.

If you invested $10,000 into WD-40 Company ($WDFC) a decade ago, your initial position would have grown to over $36,127. Slightly more than Vanguard’s S&P 500 ETF, which would now be worth $32,318.

Why did a company that makes $8 cans of spray-on lubricant beat an index containing 500 companies, including innovators like Microsoft and Netflix?

Several reasons.

A Low-Competition Niche

WD-40 Company makes a spray-on lubricant people use to loosen rusty hinges and clear away bike chain gunk. This is a pretty small niche without many competitors.

While companies like Apple and Samsung must compete to make a better phone every year, WD-40 Company innovates by adding a flexible spray-nozzle to their cans and making a “travel-size” version of their product.

WD-40 lubricant doesn’t need to change or improve every year.

Wall Street’s High Multiple

Despite its long history of beating the market, WD-40 Company rarely gets much investment coverage. This isn’t because the stock is a “hidden gem” that nobody knows about. It’s due to the fact that WD-40…