Technology and Media Companies Dominate Global Large-Cap List in BCG’s 20th Annual Value Creators Rankings
BOSTON—Technology and media companies take 9 of the top 10 spots and 13 of the top 20 among global large-cap companies in the 2018 Value Creators rankings released today by The Boston Consulting Group (BCG). This is the 20th annual edition of the rankings, which shed light on patterns and characteristics of the world’s top value creators.
The following companies are, in descending order, the five biggest large-cap value creators for shareholders over the past five years: Nvidia (US), Netflix (US), Broadcom (Singapore), Tencent Holdings (China), and Facebook (US). Nvidia, Netflix, Broadcom, and Tencent maintain four of the top five positions for the second year in a row. Facebook makes the list in its first year of eligibility, five years after its initial public stock offering.
The top five are followed by Sony (Japan), Keyence (Japan), Amazon (US), Adobe Systems (US), and Kweichow Moutai (China), which stands out because it’s in the consumer nondurables industry and the highest-ranked company that is not from the technology or media and publishing sectors.
The 2018 Value Creators study ranks companies by total shareholder return (TSR) over the five years from 2013 through 2017.
“We have not seen such a dominance of effectively two sectors—technology and media and publishing—over the 20-year history of the BCG Value Creators research,” said Alexander Roos, a BCG senior partner. “It clearly shows how technology, data, and content have become the most critical resources for value creation.”
The median TSR for all of the more than 2,400 companies in BCG’s value creators database is 15.6%, well above the long-run historical average of approximately 10%. Notably, the five-year average TSR for the top ten value creators is 49% (with a range of 35% to 76%), compared with 41% for last year (with a range of 66% to 30%).
Looking beyond large-caps to the overall database of companies in the 2018 BCG Value Creators study, the industries that created the most value during the past five years are mid-cap pharma and automotive components, followed by technology, media and publishing, medical technology, and consumer durables. Interestingly, large-cap pharma fell out of the top 20 after sitting at number one just a few years ago.
In terms of location, 5 of the top 10 large-cap value creators and 14 of the top 20 are based in the US. (It is worth noting that the US is home to almost half of the 200 largest companies by market cap.) In terms of the overall database, Asian companies hold seven of the top ten spots and more than 60 of the top 100 positions.
“The strong TSR performance of emerging Asian companies in the overall database suggests that the global large caps dominating the headlines today may be facing new challengers in coming years that are not yet on these companies’ radars—or their investors’ radars,” said Hady Farag, a BCG associate director. “Take note of the up-and-coming companies around the world; they will likely be the next wave of new market entrants, competitors, and acquirers.”
Relative to the number of companies in the overall value creators database, the countries with the highest proportion of top performers are India, Japan, and China, respectively. Especially notable is that 35% of Indian companies in the sample rank as top ten value creators in their respective industries.
TSR measures the combination of share price gains and dividend yield for a company’s stock over a given period. BCG believes it is the most comprehensive metric for performance in shareholder value creation. Average annual TSR represents the amount of TSR a company delivered, on average, over a five-year period.
The 2018 BCG Value Creators ranking is the 20th annual edition of the study and the first presented in an online interactive format that allows users to see the TSR performance of the top 50 large-cap companies and other value creators across 33 industries, as well as review the individual drivers behind each company’s TSR performance.
To view the 2018 BCG Value Creators rankings in the interactive format, please visit https://on.bcg.com/2MAOhoq.
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. The 2018 Value Creators study classifies Amazon as “retail,” consistent with previous ones. Given Amazon’s portfolio, however, the company may be classified as “technology” elsewhere.
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