“With world oil prices high, the energy sector’s strong showing in this year’s ranking of the BusinessWeek 50 comes as no surprise. But a host of companies—from Apple to Staples—have scored big by using technology, design, or clever marketing to build intense customer loyalty,” BusinessWeek writes. “Methodology: how we measured the Top 50: One of the BusinessWeek 50’s main goals is to capture the dynamic nature of strong growth. That’s reflected in how we identify the best of the Standard & Poor’s 500-stock index. We use 10 performance metrics, starting with sales and earnings growth. We tally both for the most recent 12-month and three-year periods, to reward companies that prosper over time. This year, for the first time, we include long-term earnings prospects. We factor in net profit margins. And finally we account for the market’s view, by measuring total shareholder returns for one- and three-year periods. We weight the results for sales volume, because it’s harder for large companies to post impressive revenue- and profit-growth figures. And we factor in the debt-to-capital ratio, to recognize clean balance sheets. That also makes it harder for corporations to qualify with growth that’s primarily the result of debt-laden acquisitions.”
The Top 10 of The 2006 BusinessWeek 50:
1. Apple Computer (2005 Rank: 14) – All those little white earbuds are a bona fide cultural phenomenon —and serious business for Apple. Booming sales of its iPod music players have propelled the Cupertino (Calif.) icon to the top of our list of the best corporate performers. Apple shows few signs of slowing down. Of the 42 million iPods sold since the line was introduced five years ago, 32 million were sold in 2005, including 14 million in a killer Christmas quarter. Apple’s profits leapt 216% in 2005 on a 66% jump in sales. Investors are still bullish, not only for what Steve Jobs has done, but also for what lies ahead. Jobs, soon to be the biggest shareholder in Walt Disney Co. thanks to its recent purchase of his Pixar Animation Studios, has inked landmark deals with TV studios and other Old Media powers. If Apple can extend its portable music dominance into the living room, its remarkable recovery might have far to run.
3. Caremark Rx
4. UnitedHealth Group
6. Occidental Petroleum
Other companies of interest in the top 50:
19. Best Buy
Full article here.
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