Related Expertise: Value Creation Strategy and Shareholder Activism Defense, Corporate Finance and Strategy
When it comes to achieving superior performance over the long term, the firms topping BCG’s Value Creators rankings have perfected the art. For the past 20 years, BCG has been ranking companies on the basis of total shareholder return (TSR), a long-term metric that reflects the true bottom line for a company’s shareholders. The following highlights from BCG’s 2018 Value Creators rankings are available—for the first time—as an online interactive presentation.
This year, technology and media companies dominate the large-cap top-ten list. On the basis of their average TSR over the five years from 2013 through 2017, technology and media companies occupy 9 of the top 10 spots and 13 of the top 20. (See also The 2018 Value Creators Report: Hardwiring Digital Transformation, BCG report, February 2018.) Nvidia, Netflix, Broadcom, and Tencent Holdings hold 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 IPO). Aerospace and defense and health care services companies together occupy 5 of the top 20 slots.
The top ten value creators delivered five-year average TSR of 49% from 2013 through 2017, with a range of 35% to 76%—an impressive performance, considering that there are fewer turnaround stories in the 2018 list than in prior years (including 2017, when the average TSR was 41%, with a range of 66% to 30%). For comparison, the median TSR for all of the more than 2,400 companies in the database was 15.6%.
Five of the top 10 large-cap value creators and 14 of the top 20 are based in the US, but it should be pointed out that the US is home to almost half of the 200 largest companies by market capitalization. Among the full group that we track, those based in Asia hold down seven of the top ten spots and more than 60 of the top 100 positions.
Technology and media and publishing moved up to rank 3rd and 4th (from 13th and 7th last year), while the other top five industries show little change. Mid-cap pharma ($5 billion to $18 billion in market capitalization) and automotive components hold the top two spots, while consumer durables and medical technology are strong performers in 2018, as they were in 2017. Travel and tourism and aerospace and defense each move up several spots into the top ten this year. Large-cap pharma (capitalized at more than $18 billion), which had been the number-one value creator industry just a few years ago, falls out of the top 20 (to number 22) this year. At the other end of the spectrum, the well-reported pressures on such industries as mining, oil, metals, and utilities continue unabated.
As results like these show, the question is not just which companies and industries outperform but also how exactly they do it. The new interactive format allows you to explore the TSR performance of the top 50 large-cap companies in our 2018 rankings—including their performance since we started the Value Creators series in 1999—as well as the TSR performance of companies across 33 industries. It also disaggregates the TSR performance of individual companies into its key components.