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TheStreet Open House

10 Best-Performing S&P 500 Stocks of 2011

Stocks in this article: COG NSM MA LO CMG AN BIIB ISRG WYNN DFS

BOSTON ( TheStreet) -- U.S. stocks have tumbled 15% from a 52-week high three months ago, as investors moved out of riskier assets on signs the economy is slowing. Still, a diverse group of S&P 500 stocks, from MasterCard (MA - Get Report) to Lorillard (LO - Get Report), have climbed as much as 84% this year.

The S&P 500, the benchmark for equity investments in the U.S., is now down almost 8% in 2011 after two years of strong gains. The decline is largely the result of a tumultuous August, when the U.S. saw its triple-A credit rating downgraded by Standard & Poor's for the first time in history following a tense debate over the debt ceiling. Stocks, as measured by the S&P 500, have slumped 10% this month.

The poor handling of the debt issue by Congress is only one reason investors are more pessimistic than optimistic today, as many other concerns emanating from around the globe keep piling up. Europe's debt woes, driven by Greece, threaten to stall economic growth. Japan fell back into a recession after the earthquake and subsequent tsunami in March, and China, the engine of global growth, is stalling amid higher interest rates.

Banking and technology stocks have borne the brunt of declines in the U.S. Hudson City Bancorp (HCBK), AIG (AIG) and Bank of America (BAC) are down more than 40% this year, while Akamai Technologies (AKAM), F5 Networks (FFIV), Juniper Networks (JNPR) and Tellabs (TLAB) have plunged more than 44%.

On the other hand, some large-cap stocks from a variety of sectors are posting big gains this year, supported by fat profit margins and increasing revenue growth. The 10 best-performing constituents of the S&P 500 are presented on the following pages, ranked by total return through the first eight months of the year.






10. Discover Financial (DFS)

Company Profile: Discover is a U.S. credit card issuer, and offers customers other consumer loans and deposit products.

2011 Total Return: 32.3%

Current Share Price: $24.40 (Aug. 25)

Unlike most financial stocks that have been mired in the red, shares of Discover have outperformed the market this year. In July, the stock hit a 52-week high of $28 shortly after Discover reported a 133% increase in second-quarter net income. The jump in profit came thanks to an increase in card sales volume and total loans, as well as a decline in provisions for loan losses.

The conservative lending approach has made the stock a favorite among analysts. Thirteen researchers have a "buy" rating on shares, including FBR Capital and Sandler O'Neill, and another 10 say investors should hold onto shares. No Wall Street firm has a "sell" rating on the stock, according to a Bloomberg survey of analysts. The average price target of $29 represents upside potential of 17%.

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