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US Companies Lead in Value Creation, but Asian Companies Are Catching Up

Although US Firms Take Seven of the Top Slots in BCG’s 2019 Large-Cap Value Creators Ranking, Asian Firms Dominate the Broader Rankings

BOSTON—US companies continue to lead the way among the world’s large-cap value creators, taking 7 of the top 10 spots and 11 of the top 20 for global large-cap companies in the 2019 Value Creators rankings released today by Boston Consulting Group (BCG). This is the 21st annual edition of the rankings, which shed light on patterns and characteristics of the world’s top value creators.

Only 2 of the top 10 large-cap value creators and 5 of the top 20 are based in Asia, reflecting the disproportionate number of North American companies that rank among the largest companies by market capitalization. But a look at performance beyond the top 20 large-cap value creators reveals a much different picture. Among the top 100 performers, 28% are North American and 55% are Asian. Similarly, among the 330 companies that rank in the top 10 in their industry, 29% are North American and 45% are Asian.

"Asian companies are catching up to, and in some cases surpassing, their longer-established US counterparts in value creation,” said Alexander Roos, a BCG senior partner. “We expect that our annual rankings will provide important insights into this trend in the coming years.”

Since 1999, BCG has published annual rankings of the world’s top value-creating companies, measured on the basis of total shareholder return (TSR) over the previous five-year period. To compile the 2019 rankings, BCG analyzed TSR at approximately 2,250 companies globally (slightly more than one-third of them US-based companies) from 2014 through 2018. In addition to providing our large-cap ranking of five-year TSR at the world’s 200 largest companies by market valuation, the 2019 Value Creators rankings offer rankings of the top 10 value creators in each of 33 industry sectors.

TSR measures the combination of share price gains and dividend yield for a company’s stock over a given period. It is the most comprehensive metric of performance in shareholder value creation. Average annual TSR is the amount of TSR that a company delivered, on average, over the five years covered in BCG’s 2019 analysis.

Key findings:

  • From 2014 through 2018, the top 10 value creators delivered an average five-year TSR of 35%, spanning a range from 27% to 54%.
  • The median five-year TSR for the more than 2,200 companies in the database was 8.2%, which is in line with long-term global capital market returns. In contrast, the median TSR for last year’s sample, covering 2013 through 2017, was 15.6%, reflecting the strong bull market throughout that five-year period.
  • Technology and media are once again the primary value-driving sectors on the large-cap leader board, but this year’s list is somewhat more diverse. Tech and media companies hold down 6 spots in the large-cap top 10 and 8 spots in the large-cap top 20 this year—down from 9 spots and 13 spots, respectively, in last year’s ranking. Medical technology and health care services companies occupy 4 of the top 20 spots, up from 3 last year.
  • Among the 33 industries tracked, health care services leads the charge with a median annual TSR of 17%—more than twice the median for all companies in the database. Medtech finishes a close second, with a median annual TSR of 16%, followed by financial infrastructure providers (at 15%) and technology (at 14%). Technology and medtech were top-performing industries in last year’s rankings as well, coming in third and fifth, respectively, among the 33 industries. In contrast, health care services finished at number 13 in the 2018 rankings.
  • In the list of the world’s 200 most valuable companies, for the third year in a row, Nvidia, Broadcom, and Netflix hold three of the top five positions. Adobe Systems joins the top five, while Tencent drops to eighth place. Facebook plunges from number 5 last year to number 33 this year—no surprise given the company’s steep decline in value during the market correction that occurred in the fourth quarter of 2018. Kweichow Moutai, a Chinese consumer nondurables company, vaults from tenth place last year to second place this year.
  • Among the more than 2,000 companies in BCG’s database that were publicly listed during each of the ten years from 2009 through 2018, only four (approximately 0.2%) outperformed their respective local market index every year. Looking at a broader set of more than 5,700 companies that have more than $1 billion in market capitalization, the study found that a similar percentage (approximately 0.3%) achieved this feat each year over the period.

“Many companies ride a wave of success in specific market cycles, but it is extremely rare, and an even greater accomplishment, for a company to deliver strong performance year after year,” said Eric Wick, a BCG senior partner.

The 2019 BCG Value Creators ranking is 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 to review the individual drivers behind each company’s TSR performance.

The 2019 BCG Value Creators rankings can be viewed here.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

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