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The Motley Fool, a multimedia financial-services company providing analysis to a broad investment community, recently ranked 1,700 public companies on a number of factors and released a list of what their team judges to be the Top 25 Companies in the U.S. Rather than focusing on short term performance measurements, the Motley Fool team believes the most successful companies focus on the long term.
Their recent article states, “Several studies suggest that companies that focus on multiple stakeholders tend to achieve better financial performance over the long term.” The team took several months to compare companies and compile their results. As the article indicates, the Motley Fool team believes “that the greatest and most successful companies are those that are able to benefit all of the various groups." |
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Read the article on Motley Fool |
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How the Motley Fool Ranks Companies:
Overall, 1,700 companies were considered eligible. These included all America-based companies with at least $200 million in market capitalization and a five-year history as a public company.
Here's some more detail on how each of the four stakeholder scores was calculated.
Investor (28.3% weighting)
Investor scores were based on data from S&P Capital IQ:
- 5-Year Median Return on Capital (2/3 weight)
- 5-Year Total Revenue Growth (1/3 weight)
- Must have a 5-year total return among the top 4/5 of eligible companies (i.e. greater than -13%)
- Forward-looking competitive pressures, governance, and capital allocation history were also considered in the “investor” category.
Customer (28.3% weighting)
Customer scores were determined by:
- Wratings customer surveys of customer expectations in nine different areas relating to fair pricing, leadership, and uniqueness
- As well as data from:
- American Customer Satisfaction Index
- Satmetrix US Consumer NPS Benchmark Study 2012
- Interbrand 2012 rankings
- Industry-specific data from company 10-K filings
Employee (28.3% weighting)
Employee scores were determined by:
- Glassdoor data measuring employees’ willingness to recommend their employer to a friend, as well as employee satisfaction with career opportunities, compensation and benefits, senior leadership, work-life balance, and culture and values
- LinkedIn proprietary data measuring the most sought-after employers relative to their reach
World (15% weighting)
“World” scores assess companies’ impact on the wider world, calculated as the sum of purpose, philanthropy, and sustainability scores.
- Purpose (4 points available):
- Offers products and services that fundamentally make the world a better place (3 points)
- Offers useful, necessary, or desired products and services (2 points)
- Offers mildly harmful products and services (0-2 points), taking into account any measurable and effective steps intended to limit their harmfulness
- +1 bonus for revolutionary products, services, or business models
- -1 deduction for gratuitous tax evasion, poor corporate and executive compensation governance
- Philanthropy (3 points): Charity, community, or pro bono contributions and effectiveness relative to company market capitalization
- Sustainability (3 points): Environmental record, human rights and labor practices, and record of improvement
