Large cap companies trounced their smaller rivals in the stock market during the 1980s and 1990s, as investors loaded up on brand names and blue chip companies during the greatest bull market the U.S. has ever seen. The S&P 500 returned 18% annually during the two decades, while the Russell 2000 small cap index clocked in at a still impressive 14% per year. The tables turned with the Internet bubble bursting in 2000 and the financial crisis later in the decade. The S&P was dead money between 2000 and 2010, while the Russell rose 79%. Yet, small companies have taken it on the chin over the last 12 months with the S&P outperforming the Russell 2000 by 14 percentage points.
Small caps present tremendous opportunities for investors with faster growth potential in many cases versus multi-billion dollar conglomerates. Each year Forbes looks to identify up-and-coming companies that have displayed strong, consistent growth in our feature on America’s Best Small Companies. Our 36th annual list highlights businesses that span the economy from aerospace to homebuilding to retail.