The Lubricant That Hasn't Changed Since 1953

In 1953, a small chemical company in San Diego called Rocket Chemical Company was working on a formula to prevent corrosion on the outer skin of the Atlas missile, which was being developed by Convair. The chemists tried 39 different formulations before achieving the desired result on the 40th attempt. The product, called "Water Displacement, 40th formula" — abbreviated to WD-40 — was originally intended exclusively for aerospace use. By 1958, employees of Rocket Chemical were taking home small unauthorized samples to use on personal household items. The company gradually realized that the consumer market was substantial. In 1969, Rocket Chemical was renamed WD-40 Company.

By 2024, WD-40 generated approximately 590 million dollars in annual revenue. The product itself has not meaningfully changed since the 1950s. The branding has remained essentially identical. The blue-and-yellow can with the small red cap is one of the most recognizable consumer-product designs in the world. The company's stock has compounded at approximately 13 percent annually for decades.

The Formula. The exact composition of WD-40 has been a closely guarded trade secret since the 1950s. The Material Safety Data Sheet discloses general categories — petroleum distillates, aliphatic hydrocarbons, surfactants, anti-corrosion agents — but the precise ratios and additional components remain proprietary. The formula is reportedly known to only a small number of employees and is not patented (which would require disclosure). The trade-secret approach has kept the formula stable for 70 years.

The Documented Uses. The WD-40 Fan Club (an actual organization administered by the company) maintains a list of documented uses for WD-40. As of 2024, the list exceeds 2,000 entries. Common categories include lubricating squeaky hinges, removing crayon from walls, untangling fishing reels, removing chewing gum from carpet, freeing rusted nuts and bolts, cleaning grease from kitchen surfaces, removing scuff marks from floors, lubricating zipper teeth, and dozens of automotive applications. Some of the uses are unusual: removing octopus ink from divers' wetsuits, displacing moisture from electrical contacts in flooded basements, lubricating dental chairs.

The Brand Stability. What makes WD-40 unusual as a consumer-products case study is its absolute brand stability. The packaging has remained essentially unchanged for 70 years. The marketing voice has remained consistent. The retail distribution has stayed in hardware stores, automotive supply stores, and increasingly in mass-market retailers. The brand has not extended into adjacent categories — there are no WD-40 hand tools, no WD-40 house cleaners, no WD-40 motor oils. The company has maintained focus on the single product line.

This focus is unusual. Most consumer-products companies pursue brand extension aggressively. The Procter & Gamble or Unilever model is to leverage strong brands into adjacent categories with related-product marketing. WD-40 has done very little of this. The company has launched a handful of related products (a contact cleaner, a silicone lubricant), but the primary brand has remained focused on the original blue-and-yellow can.

The Financial Performance. WD-40 Company is a publicly traded micro-cap stock (WDFC). The financial performance has been remarkably consistent. Revenue has grown roughly 5-7 percent annually for decades. Operating margins have stayed in the 18-22 percent range. Free cash flow conversion is high. Dividends have been paid and increased for over 30 consecutive years. The stock has compounded at approximately 13 percent annually over 30 years — substantially better than the S&P 500.

The investor base for WD-40 is unusual. The market cap is too small for most institutional investors. The growth profile is too modest for growth-focused investors. The product is too unglamorous for ESG-focused investors. The result is an investor base of patient long-term holders who recognize the operational discipline and stability.

The Larger Lesson. What WD-40 demonstrates is that one product, executed with discipline and stability for 70 years, can produce extraordinary cumulative returns. The temptation in modern consumer-products management is to constantly innovate, extend, and reposition. The WD-40 management has resisted that temptation for seven decades. The financial result has been one of the most stable compounding stories in American small-cap retail.

There is something almost philosophical in the WD-40 story. The product has not been improved meaningfully since 1953. The branding has not been "modernized." The company has not pursued aggressive M&A or expansion strategy. It simply makes the original product, sells it through the same channels, in the same can, year after year.

The compounding from this discipline has exceeded what most marketing-and-innovation-focused consumer-products companies have achieved. The lesson, perhaps, is that durability sometimes beats reinvention.

Now go enjoy your Saturday. Whatever needs lubricating can wait.

Sources: - WD-40 Company (NASDAQ: WDFC) annual reports and 10-K filings - WD-40 Fan Club user submissions - Industry coverage: Investor's Business Daily, Wall Street Journal - Trade-secret disclosure documents (MSDS)