The Forgotten Blue Chip Stock That's Been Quietly Compounding at 15%+ a Year
Key Points
eBay has delivered a 15.8% annualized total return over the past decade, beating the S&P 500 by a small margin.
The company's share count has dropped 62% since 2015 thanks to aggressive buybacks
Its pending $12 billion acquisition of Etsy's Depop brings 56 million younger users to the platform.
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When investors think of e-commerce giants, eBay (NASDAQ: EBAY) rarely tops the list. The lack of fanfare hasn't stopped the online marketplace from beating the market in the long term, though.
As of April 1, the 30-year-old company has been compounding at 14.3% annually over the last decade. Throw in a dividend policy yielding 1.5% annually and you get a total return of 15.8% per year. That's enough to outpace the S&P 500's (SNPINDEX: ^GSPC) 14.2% total return without ever trending on social media.
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EBAY Total Return Level data by YCharts
The numbers behind the quiet compounder
The company isn't trying to be everything to everyone. Unlike Amazon or Alibaba, it's not building enterprise-class artificial intelligence (AI) tools or same-day shipping networks. It's just connecting buyers and sellers of used sneakers, vintage watches, and rare Pokémon cards while steadily growing revenue.
Meanwhile, the company's capital allocation has been shareholder-friendly. It returned approximately $3 billion to shareholders in 2025 through buybacks and dividends. And those buybacks make a big difference. eBay's share count is down by a staggering 62% since the end of 2015.
eBay is deliberately prioritizing steady, predictable margins over boundless, expensive expansion. That might be exactly what you're looking for in a robust, long-term investment.
Can the compounding continue?
I can't promise that eBay's market-beating compounding will continue for another decade, but the setup looks promising.
The pending $12 billion acquisition of Etsy's (NYSE: ETSY) Depop service brings millions of young buyers to a platform that desperately needed a demographic refresh, as nearly 90% of Depop's 56 million users are under 34. Excluding the incoming Depop pop, management guides for 2026 gross managed value (GMV) growth similar to last year's 6% increase.
The risks are real but manageable. Europe is sluggish, trade policy keeps shifting, and some of the recent GMV gains came from people panic buying gold coins.
But eBay isn't trying to conquer the world. It has a narrower ambition: to be the best place to find (or sell) rare or collectible items. That's a more defensible target.
Image source: Getty Images.
For long-term investors who want e-commerce exposure without betting on whether Amazon's next AI project will work out, eBay offers a boring stock that actually compounds. eBay's valuation is modest, the capital returns are consistent, and the business aligns with where consumer behavior is heading.
eBay is where I sell my gently used computer parts while finding video camera lenses for my kid in film school. Thanks to the company's generous cash returns and the stock's quiet long-term gains, it may also be my next investment.
Should you buy stock in eBay right now?
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Anders Bylund has positions in Alibaba Group and Amazon. The Motley Fool has positions in and recommends Amazon, Etsy, and eBay. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.
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