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And Business Week has their "Top 50" this week...boring isn't it?--->
Business Week: March 29, 1999
Cover Story
The Top 50
1. MICROSOFT
2. DELL COMPUTER
3. GAP
4. ORACLE
5. EMC
6. COMPUWARE
7. AMERICA ONLINE
8. MORGAN STANLEY DEAN WITTER
9. SBC COMMUNICATIONS
10. SCHERING-PLOUGH
11. TELLABS
12. WARNER-LAMBERT
13. HOME DEPOT
14. CISCO SYSTEMS
15. CAPITAL ONE FINANCIAL
16. MERCK
17. AIRTOUCH COMMUNICATIONS
18. CHARLES SCHWAB
19. TJX
20. AMERITECH
21. MARSH & McLENNAN
22. BMC SOFTWARE
23. SUN MICROSYSTEMS
24. GATEWAY 2000
25. ELI LILLY
26. FORD MOTOR
27. MBNA
28. BELLSOUTH
29. NAVISTAR INTERNATIONAL
30. OMNICOM GROUP
31. SAFEWAY
32. SOLECTRON
33. CARNIVAL
34. PAYCHEX
35. WAL-MART STORES
36. INTERPUBLIC GROUP
37. LOWE'S
38. MAYTAG
39. FREDDIE MAC
40. INTEL
41. BB&T
42. BRISTOL-MYERS SQUIBB
43. DAYTON HUDSON
44. GENERAL ELECTRIC
45. AMGEN
46. AES
47. KOHL'S
48. WASHINGTON MUTUAL
49. BELL ATLANTIC
50. STATE STREET
Business Week: March 29, 1999
Cover Story
Spotting Winners: Our Selection Criteria
Sure, size matters. But what's the point in being bigger if you're not better? With that in mind, BUSINESS WEEK two years ago introduced our Performance Rankings and its centerpiece, the BW 50 list of the best overall performers among the S&P 500 companies. We wanted to go beyond static lists that rank companies by sheer size or market capitalization. So we created a measure of growth that rewards companies for performance that truly rises above the crowd.
To calculate our Performance Rankings, we began with two important factors investors use to judge performance: top-line revenue growth and earnings growth. We added total returns, a measure of how well management is doing. And recognizing that it is much harder to sustain growth than sprint for a few quarters, we tallied all three of those crucial rates over both one- and three-year time spans. Finally, we added two important indicators of the returns management earns from its assets: net margins and return on equity, both for one year.
With those criteria in hand, we evaluated each of the companies in the closely watched Standard & Poor's 500-stock index. (S&P is owned by The McGraw-Hill Companies, which also owns BUSINESS WEEK.) Why the S&P 500? Because it is a universally accepted measure for stock performance, both on Wall Street and among small investors. Its 500 companies together comprise 70% of the market value of U.S. stocks.
What you're left with is an in-depth look at how these companies really stack up against one another. Who had the best--or worst--three-year shareholder return among the 500? The best net margins? Answers to those questions and more can be found in the tables throughout this package.
MAKING THE GRADE. But that's only a start. We've also graded the 500 companies on each of the eight criteria, based on how well each performed against other companies in the index. For each measure, the top 20% of companies earned A's the next 20% got B's, and so on down to the F's in the bottom 20%. The several S&P companies for which data were not available got incompletes.
Finally, to get our overall Performance Rankings of the 500--and select the elite that make up each year's BW 50--we averaged together the individual rankings each company received for the different criteria. Then, to recognize that it's much easier for small companies to score big percentage gains than it is for big companies, we weighted them by sales volume.
That gives you the overall Performance Rankings. The same criteria form the basis for each company's ranking within its sector, which can be found in our Industry Rankings tables. Together, the pair of tables form an annual corporate scorecard. Think of those at the top as the All Stars. For the bottom dwellers, it's time to run some laps.
By Dan Beucke in New York
Copyright 1999 The McGraw-Hill Companies, Inc. All rights reserved. Any use is subject to (1) terms and conditions of this service and (2) rules stated under ''Read This First'' in the ''About Business Week'' area.
03/18/99 20:32 |
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