Despite the relative strength of the economy, Australia's top stocks have lagged behind their US counterparts over the past five years, research shows.
A report by Boston Consulting Group (BCG) shows Australia's top 200 companies have delivered an average total shareholder return - which includes dividends and gains in the value of the stock - of 3.3 per cent in the past five years.
By contrast, the top 500 companies in the US delivered an average return of 6.9 per cent.
Australian companies have performed better in the past two years, with an average return of 7.2 per cent, but still lagged behind their US counterpart, which achieved an average return of 12 per cent.
That's despite the Australian economy performing significantly better than the US since the start of the global financial crisis.
But with economic growth expect to slow due to waning mining investment, BCG corporate development leader for Australia Nick Glenning said local companies will find it even harder to deliver solid gains to investors.
"Many companies will need to rethink their strategies and find new ways to achieve growth. Without fresh approaches to their growth dilemma, management will come under increasing pressure and demand for change from investors," he said.
But the report found a number of Australian companies had performed well ahead of the pack over the past decade.
The strongest performer was REA group - owner of websites including realestate.com.au, which has delivered an average return of 61 per cent a year.
Other strong performers included engineering firm Monadelphous and oil and gas services provider Mermaid Marine, both with an average annual return of 39 per cent, and vaccine maker CSL, with an average return of 34 per cent.
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