Curtiss-Wright's 15-Year Outperformance: A Case Study in Compounded Growth and Strategic Resilience

Over the past 15 years, Curtiss-Wright (CWI) has delivered a staggering 21.46% compound annual growth rate (CAGR) in shareholder value, far outpacing the S&P 500's 14.66% CAGR during the same period. This performance, coupled with a market capitalization surge from $1.53 billion in 2010 to $20.48 billion in 2025, positions the aerospace and defense manufacturer as a compelling case study in long-term compounding and industrial stock selection. How did Curtiss-Wright achieve such outsized returns? The answer lies in a combination of sector-specific tailwinds, disciplined capital allocation, and a business model designed to thrive in volatile macroeconomic environments.

The Power of Compounding in a High-Barrier Industry

Curtiss-Wright's 15-year CAGR of 21.46% translates to a 34.5x return on investment, dwarfing the S&P 500's 11.7x return. This disparity is not accidental but a product of operating in a high-margin, high-barrier industry. Aerospace and defense, by nature, are capital-intensive sectors with long lead times and regulatory hurdles, creating a moat that protects incumbents from disruptive competition. Curtiss-Wright's expertise in niche areas like motion control, fluid systems, and power generation has allowed it to secure recurring revenue streams from critical infrastructure and defense contracts.

The company's dividend growth further amplifies its compounding potential. From 2010 to 2025, annual dividends per share increased from $0.32 to $0.96, reflecting a 10.5% CAGR in payouts. While the dividend yield has fluctuated-averaging 0.35% over the past five years according to market data-the consistency of these increases underscores management's commitment to returning capital to shareholders, a key driver of long-term value creation.

Strategic Resilience in a Cyclical Sector

The aerospace and defense industry is inherently cyclical, yet Curtiss-Wright has navigated macroeconomic volatility with remarkable resilience. Its market cap growth from $1.53 billion to $20.48 billion over 15 years reflects a company that has consistently aligned its operations with secular trends. For instance, the post-2008 defense spending boom and the recent push for domestic industrial policy in the U.S. have provided sustained demand for Curtiss-Wright's specialized components.

This resilience is also evident in its outperformance during the 2020 market crash. While the S&P 500 fell by 34% in March 2020, Curtiss-Wright's stock held up relatively well, losing only 22% before rebounding with the broader market. Such stability is rare for industrial stocks and highlights the defensive qualities of a business deeply embedded in critical infrastructure.

### Lessons for Industrial Stock Selection
Curtiss-Wright's success offers valuable insights for investors seeking long-term compounding opportunities in industrial sectors:
1. Focus on High-Barrier Niches: The company's dominance in specialized aerospace and defense subsegments-such as high-integrity fluid systems-creates pricing power and customer stickiness.
2. Prioritize Recurring Revenue: A significant portion of Curtiss-Wright's business comes from long-term contracts with governments and primes, ensuring predictable cash flows even in downturns.
3. Balance Growth and Dividend Discipline: The 10.5% CAGR in dividends demonstrates that growth and income can coexist, rewarding patient investors with both capital appreciation and compounding returns.

The Road Ahead

While past performance is no guarantee of future results, Curtiss-Wright's track record suggests it is well-positioned to continue outperforming. With global defense budgets projected to rise in response to geopolitical tensions and the company's R&D focus on next-generation technologies like additive manufacturing according to industry reports, the fundamentals remain robust. For investors, the key takeaway is clear: industrial stocks with durable competitive advantages and a history of compounding can deliver exceptional long-term returns, even in a low-growth macro environment.