Loews Hardware
MVPs of MVA: measuring how much market value companies created. Text by Stephen Taub charts. Stern Stewart & co - The 2003 MVA Rankings - market value added - IllustrationStephen Taub
Like the wicked queen in the tale of Snow White, analysts are forever trying to identify the fairest of them all-the strongest, most innovative, and fastest-growing companies. Finance executives, in turn, are constantly seeking a metric that communicates a company's financial condition in a way that enables employees to make rational decisions about operations. There is no shortage of metrics, but as the past two years have witnessed, many of them, in particular EBITDA and pro forma, have been vulnerable to distortion.
Enter MVA, or market value added, which measures the amount of wealth a company has created since its inception. MVA is an extension of EVA (economic value added), a metric that became popular in the 1990s, when companies used it to measure profitability not just at the corporate level, but also at the level of business units and individual projects.
EVA is described by Bennett Stewart, senior partner at consulting firm Stern Stewart & Co., which has trademarked the acronym, as an estimate of the amount by which earnings exceed or fall short of the rate of return shareholders and lenders could get by investing in other securities of comparable risk. "EVA is a practical method of estimating the economic profit that is earned, as opposed to the accounting profit," he says. "It's really a finance tool for non-finance executives. Finance execs don't need EVA]'
"It simplifies everything," insists Sal Fazzolari, senior vice president, CEO, and treasurer of Harsco Corp., a Camp Hill, Pennsylvania-based industrial-services firm, which began implementing MVA and EVA as financial-measurement
tools in 2001. "It's one measurement for everyone in the company to concentrate on. It takes into consideration all of a company's financials."
At the heart of MVA and EVA are the beliefs that (1) the primary objective of management should be to maximize return to shareholders and (2) a company should earn more than its cost of investment.
In a nutshell, EVA is equal to a company's net operating profits after taxes (NOPAT) minus a capital charge--the amount of capital invested in the business times the cost of capital. EVA converts the balance sheet and income statement into one measurement of profit, Stewart explains. "It's as if the company ended up with no assets and leased everything, factored all receivables," and so on, he says, adding, "it's the profit that would be reported if all assets were externally financed." Stewart argues that looking at financials in this way enables a company to truly understand whether it is profitable because it manages assets well or simply because it is an owner of assets.
Fazzolari says that for many years, different business units at Harsco focused on a variety of metrics, such as return on capital, return on sales, net income, and sales. "These metrics can send you in different directions," he says. "EVA makes you focus on all of the financial statements."
EVA has enabled Harsco to improve its capital-allocation process by stanlardizing the way each manager and employee analyzes a project. For example, if a customer requests an extra 30 days to pay its bill, Harsco's employees can immediately calculate the potential financial impact on the company. Each month, Harsco calculates EVA by business unit. "It is automatically generated," says Fazzolari. Each employee can then access the tools needed to calculate EVA.
At consulting firm Accenture, EVA performance is linked with compensation for the firm's partners. "A big portion of our partners' and units' compensation is based on EVA generation;' explains CEO Harry You. You likens EVA to a more precise version of return on invested capital. He also uses EVA in doing business with clients. "We look at the way we can create EVA for them," he says. "We're selling our business based on how we sell EVA to our clients. A vast majority of our clients may not use it, but they understand it."
DEFINING MVA
"EVA is the most important empirical link to MVA," says Stewart. The change in EVA explains 35 percent of the change in MVA, or seven times more than sales growth, while the change in earnings per share explains only about 3 percent of the change in MVA.
MVA itself is the stock market's assessment of the net present value (NPV) of EVA. In other words, MVA is the difference between the market value of a company (which includes both equity and debt) and the capital that lenders and shareholders have entrusted to the company over the years. Thus, MVA is a measure of the difference between "cash in" (what investors have contributed) and "cash out" (what they could get by selling at today's prices), Stewart explains.
If MVA is positive, it means that the company has increased the value of the capital entrusted to it and thus created shareholder wealth. IfMVAis negative, the company has destroyed wealth.
Like all other metrics, says Accenture's You, MVA has its limitations. For one thing, like a company's price-to-earnings ratio, it is in part captive to the vagaries of the stock market. "Over longer periods, MVA correlates with EVA, but over a shorter time, it may not," he insists.
On the other hand, MVA is a better measure of a company's shareholder-wealth creation than simple market capitalization. Take, for example, Verizon Communications. The telecom giant's market value is $200 billion, nearly the size of Microsoft's. Although one would think the two companies therefore rewarded their shareholders equally, Microsoft's MVA is 13 times greater than Verizon's. This is because Verizon issued $65 billion of stock to buy GTE in 2000, skewing its market value growth. And this transaction followed by just three years the all-stock merger of Bell Atlantic and Nynex that first created Verizon. In the past 10 years, Verizon's total return to shareholders has been only 7.84 percent, according to Stewart.
ALL HIGH PERFORMERS ARE HOT ALIKE
The top three performers, according to the MVA ranking of Tier-1 companies, are General Electric, Microsoft, and Wal-Mart Stores. (Note: The rankings delineate Tier], Tier 2, and Tier 3 companies by size.) Although representing diverse industry sectors and business strategies, all three companies have created nearly the same amount of wealth for their shareholders-GE, $223 billion; Microsoft, $212 billion; and Wal-Mart, $207 billion.
Wal-Mart had $246 billion in sales in the most recent year, while Microsoft had "only" $31 billion. GE has $156 billion in long-term debt, while Microsoft has none. Microsoft's return on average capital is nearly twice that of the other two companies.
Of the top three companies, GE has the highest MVA and highest EVA. Wal-Mart's EVA is higher than Microsoft's, which means that the market is projecting different rates of growth for these companies. The fact that Microsoft has about the same MVA but a much lower EVA than GE means the market believes Microsoft has a greater opportunity to grow. This is partly underscored by its 22 percent return on average capital, which is nearly double that of its two MVA peers.
What does it mean that GE has the highest MVA and EVA? "If the MVA for GE is the same as for the other two companies, that means GE has less prospect for growth compared with the other two," Stewart explains. In fact, although its EVA has grown somewhat over the past three years, its MVA has eroded by more than 17 times that of Wal-Mart over the three-year period. "[Its MVA score suggests] that GE doesn't have the same intrinsic growth opportunity.
"Wal-Mart has stupendous growth prospects but the lowest return on capital, so it has significant growth at lower margins. Microsoft, on the other hand, is a higher-growth, higher-return company. GE has a low-return, low-growth base, and a modest chance to grow its EVA;' he adds.
Perhaps the most impressive large companies in the Tier-i ranking are Procter & Gamble and Johnson & Johnson, which show the best three-year improvements in MVA. (Changes in rankings between 1999 and 2002 are shown on the charts beginning on page 62, while three-year averages for EVA and MVA are available at www.cfo.com.) Procter & Gamble leaped from number 32 in 1999 to number 6 in 2002 in terms of MVA. Biopharmaceuticals company Gilead Sciences showed the highest three-year MVA gain among the 25 largest market-cap companies with less than $700 million in revenues, rising to second place from number 174 three years ago.
Technology companies rank high in terms of MVA despite the short life span of many new technology and Internet companies. Six of the 14 top large companies are tech companies; Ebay and Qualcomm fall among the top four midsize (Tier 2) companies, and Linear Technology is the highest company with sales below $700 million (Tier 3). From 1999 to 2002, Ebay, in fact, moved from number 25 to number 2 among companies with sales between $700 million and $7 billion, and now boasts twice the MVA of Amazon.com.
It's not quite the magic number that will enable a company to understand precisely what it needs to do to maximize shareholder value and increase profitability. But MVA at least offers one of the least deceptive of mirrors for companies seeking to know whether they are the fairest of their peers.
WHAT THE ACRONYMS MEAN
MVA Market Value The difference between total market
Added value (value of equity and debt)
and invested capital (money/cash
investors contributed to the
business). It measures the
difference between what investors
"put" into the company and what it
is currently worth. MVA is also
equal to the present value of all
future EVAs.
EVA Economic Real measure of economic profit.
Value Added This is calculated by reducing the
full cost of capital from NOPAT-net
operating profit after taxes. The
full cost of capital captures the
opportunity cost of all invested
capital at the blended cost of
equity and debt as applied by the
specific business.
P Score A measure of performance based on
one-year sales growth; EVA/sales;
EVA/capital; and one-year change
in EVA over capital.
R Score A measure of riskiness. It looks at
stock-return volatility, leverage,
cash flow, and size.
2003 MVA Rankings
TIER 1: 45 largest market-cap companies with sales of more than $7
billion
'02 '99 Company MVA MV Capital EVA
1 2 General Electric 222,767 322,290 99,423 5,983
2 4 Microsoft 212,340 237,547 25,207 2,201
3 6 Wal-Mart Stores 207,346 280,970 73,624 2,928
4 22 Johnson & Johnson 124,237 171,829 47,592 2,839
5 12 Merck 107,076 144,624 37,548 3,872
6 32 Procter & Gamble 92,231 133,248 41,017 2,315
7 8 IBM 90,422 193,955 103,533 (8,032)
8 13 Exxon Mobil 85,108 273,634 188,526 (2,175)
9 21 Coca-Cola 82,413 107,007 24,594 2,496
10 3 Intel 77,395 114,574 37,179 (3,736)
11 14 Dell Computer 69,425 76,637 7,212 360
12 16 Citigroup 68,078 176,795 108,716 2,964
13 1 Cisco Systems 59,702 109,249 49,547 (4,623)
14 5 Oracle 59,502 60,453 951 1,401
15 24 Eli Lilly 57,366 74,761 17,395 1,096
16 29 United Parcel Service 57,036 77,347 20,312 875
17 38 Fannie Mae 54,181 64,496 10,315 2,457
18 11 Pfizer 52,683 194,393 141,711 (2,779)
19 40 PepsiCo 49,718 81,184 31,466 1,258
20 36 Abbott Laboratories 49,181 71,352 22,171 1,562
21 18 Home Depot 43,955 69,635 25,680 1,346
23 19 American Int'l Group 40,845 129,056 88,211 (1,249)
24 37 Medtronic 40,778 60,416 19,639 (26)
25 33 Pharmacia 40,679 62,897 22,218 (1,078)
26 31 Wyeth 38,443 66,206 27,763 696
27 52 Comcast 38,008 112,530 74,522 (3,555)
29 46 DuPont 35,445 59,862 24,417 (96)
30 23 Bristol-Myers Squibb 33,872 58,015 24,142 777
32 70 Altria Group 28,230 102,082 73,852 6,696
38 60 Wells Fargo 24,065 75,537 51,473 744
39 25 BellSouth 21,787 70,580 48,793 (1,286)
40 NA Kraft Foods 21,770 73,524 51,754 732
41 92 Bank of America 20,427 100,418 79,992 341
46 26 Verizon Communications 16,138 200,132 183,994 (5,612)
62 55 Viacom 10,682 99,362 88,680 (5,092)
69 28 Walt Disney 9,282 56,974 47,692 (2,072)
95 20 Hewlett-Packard 5,476 63,243 57,767 (3,726)
106 106 ConocoPhillips 3,963 63,943 59,980 (849)
108 102 Cigna 3,826 85,436 81,611 (3,967)
113 48 Ford Motor 3,459 69,218 65,758 (4,826)
117 47 Chevron Texaco 3,135 93,457 90,322 (3,139)
246 101 General Motors (14,081) 105,697 119,778 (5,065)
249 9 AOL Time Warner (27,148) 103,550 130,697 (27,539)
251 42 SBC Communications (38,372) 118,558 156,930 (8,434)
252 65 AT&T (72,674) 75,733 148,406 (27,116)
'02 '99 Company Sales Growth (1) Performance (2)
1 2 General Electric 130,685 18% 79
2 4 Microsoft 30,785 41% 78
3 6 Wal-Mart Stores 244,524 48% 79
4 22 Johnson & Johnson 36,298 32% 90
5 12 Merck 51,790 58% 87
6 32 Procter & Gamble 42,606 7% 79
7 8 IBM 81,186 -7% 9
8 13 Exxon Mobil 178,909 11% 30
9 21 Coca-Cola 19,983 2% 85
10 3 Intel 26,764 -9% 5
11 14 Dell Computer 33,730 43% 59
12 16 Citigroup 92,029 12% 65
13 1 Cisco Systems 19,209 28% 15
14 5 Oracle 9,417 -3% 77
15 24 Eli Lilly 11,078 12% 68
16 29 United Parcel Service 31,272 16% 65
17 38 Fannie Mae 52,901 43% 92
18 11 Pfizer 32,373 100% 35
19 40 PepsiCo 25,541 31% 87
20 36 Abbott Laboratories 17,685 34% 88
21 18 Home Depot 58,247 52% 85
23 19 American Int'l Group 67,482 66% 47
24 37 Medtronic 7,309 55% 53
25 33 Pharmacia 13,993 53% 36
26 31 Wyeth 14,584 8% 72
27 52 Comcast 12,460 101% 19
29 46 DuPont 24,134 -11% 29
30 23 Bristol-Myers Squibb 18,119 7% 58
32 70 Altria Group 62,182 1% 82
38 60 Wells Fargo 28,473 31% 67
39 25 BellSouth 22,711 -10% 17
40 NA Kraft Foods 29,723 11% 63
41 92 Bank of America 46,362 -10% 38
46 26 Verizon Communications 67,625 104% 35
62 55 Viacom 24,606 91% 21
69 28 Walt Disney 25,779 8% 21
95 20 Hewlett-Packard 63,082 44% 24
106 106 ConocoPhillips 50,512 272% 61
108 102 Cigna 19,343 3% 23
113 48 Ford Motor 162,586 0% 12
117 47 Chevron Texaco 91,685 191% 60
246 101 General Motors 184,214 5% 27
249 9 AOL Time Warner 40,961 757% 17
251 42 SBC Communications 43,138 -13% 9
252 65 AT&T 49,931 -20% 4
'02 '99 Company Risk (3)
1 2 General Electric 4
2 4 Microsoft 7
3 6 Wal-Mart Stores 8
4 22 Johnson & Johnson 4
5 12 Merck 2
6 32 Procter & Gamble 3
7 8 IBM 23
8 13 Exxon Mobil 1
9 21 Coca-Cola 2
10 3 Intel 18
11 14 Dell Computer 17
12 16 Citigroup 7
13 1 Cisco Systems 37
14 5 Oracle 27
15 24 Eli Lilly 7
16 29 United Parcel Service 2
17 38 Fannie Mae 0
18 11 Pfizer 24
19 40 PepsiCo 14
20 36 Abbott Laboratories 11
21 18 Home Depot 11
23 19 American Int'l Group 5
24 37 Medtronic 11
25 33 Pharmacia 5
26 31 Wyeth 10
27 52 Comcast 62
29 46 DuPont 2
30 23 Bristol-Myers Squibb 3
32 70 Altria Group 9
38 60 Wells Fargo 1
39 25 BellSouth 11
40 NA Kraft Foods 2
41 92 Bank of America 0
46 26 Verizon Communications 48
62 55 Viacom 45
69 28 Walt Disney 25
95 20 Hewlett-Packard 61
106 106 ConocoPhillips 45
108 102 Cigna 5
113 48 Ford Motor 67
117 47 Chevron Texaco 26
246 101 General Motors 40
249 9 AOL Time Warner 81
251 42 SBC Communications 14
252 65 AT&T 23
TIER 2: 25 largest market-cap
companies with sales between
$700 million and $7 billion
'02 '99 Company MVA MV Capital EVA
1 6 Amgen 57,361 80,204 22,844 (103)
2 25 Ebay 25,489 29,094 3,606 (156)
3 85 Forest Laboratories 17,200 19,006 1,806 307
4 2 Qualcomm 17,167 24,194 7,027 (721)
5 92 SLM 15,425 16,820 1,395 589
6 35 Cox Communications 15,324 27,993 12,669 (489)
7 14 EchoStar Communications 15,076 19,107 4,031 (583)
8 36 Fifth Third Bancorp 14,945 28,846 13,901 328
9 45 Gannett 13,989 25,702 11,713 153
10 61 Avon Products 12,867 16,165 3,298 363
11 5 Applied Materials 12,546 21,322 8,776 (1,328)
14 15 Liberty Media 11,658 36,530 24,872 NA
15 107 Boston Scientific 11,599 19,638 8,039 (143)
17 20 Genentech 11,095 19,037 7,942 (621)
22 88 Tribune 9,633 20,676 11,043 (388)
23 1 EMC 9,358 19,646 10,289 (1,652)
26 70 Southwest Airlines 8,650 16,546 7,896 (4131
30 41 Cablevision Systems 7,929 17,344 9,414 (706)
54 83 USA Interactive 5,537 15,364 9,827 1,247
78 130 Anadarko Petroleum 4,156 17,686 13,529 20
185 516 DTE Energy 1,826 18,323 16,497 199
225 223 Devon Energy 1,425 15,227 13,802 (304)
263 597 Norfolk Southern 1,154 17,746 16,592 (343)
935 53 Williams (2,137) 21,149 23,286 (876)
949 865 Charter Communications (5,715) 21,169 26,884 (2,429)
'02 '99 Company Sales Growth (1) Performance (2)
1 6 Amgen 5,523 65% 76
2 25 Ebay 1,214 440% 32
3 85 Forest Laboratories 2,022 156% 99
4 2 Qualcomm 3,785 -3% 11
5 92 SLM 3,436 5% 99
6 35 Cox Communications 5,039 117% 51
7 14 EchoStar Communications 4,821 201% 28
8 36 Fifth Third Bancorp 6,317 75% 85
9 45 Gannett 6,422 22% 58
10 61 Avon Products 6,228 18% 87
11 5 Applied Materials 5,116 -15% 4
14 15 Liberty Media 2,084 106% NA
15 107 Boston Scientific 2,919 3% 32
17 20 Genentech 2,618 97% 45
22 88 Tribune 5,384 67% 26
23 1 EMC 5,438 -19% 3
26 70 Southwest Airlines 5,580 14% 17
30 41 Cablevision Systems 4,003 2% 32
54 83 USA Interactive 4,621 43% 81
78 130 Anadarko Petroleum 3,860 451% 77
185 516 DTE Energy 6,749 43% 69
225 223 Devon Energy 4,316 488% 51
263 597 Norfolk Southern 6,270 19% 37
935 53 Williams 5,608 -35% 10
949 865 Charter Communications 4,566 220% 27
'02 '99 Company Risk (3)
1 6 Amgen 57
2 25 Ebay 90
3 85 Forest Laboratories NA
4 2 Qualcomm 54
5 92 SLM 8
6 35 Cox Communications 16
7 14 EchoStar Communications 91
8 36 Fifth Third Bancorp 15
9 45 Gannett 18
10 61 Avon Products 30
11 5 Applied Materials 52
14 15 Liberty Media NA
15 107 Boston Scientific 46
17 20 Genentech 46
22 88 Tribune 47
23 1 EMC 48
26 70 Southwest Airlines 40
30 41 Cablevision Systems 77
54 83 USA Interactive 20
78 130 Anadarko Petroleum 77
185 516 DTE Energy 47
225 223 Devon Energy 84
263 597 Norfolk Southern 46
935 53 Williams 71
949 865 Charter Communications 91
TIER 3: 25 largest market-cap
companies with sales below $700
million
'02 '99 Company MVA MV Capital EVA
1 7 Linear Technology 9,025 9,584 559 27
2 174 Gilead Sciences 7,956 9,754 1,798 (135)
3 70 IDEC Pharmaceuticals 4,077 5,829 1,753 (57)
4 47 Microchip Technology 3,133 4,331 1,198 (89)
6 71 Westwood One 2,879 4,129 1,250 (14)
7 157 Pixar 2,709 3,285 577 31
8 111 SEI Investments 2,447 2,766 318 109
9 14 Citrix Systems 2,391 3,558 1,167 (197)
10 25 Mercury Interactive 2,358 3,016 658 (125)
11 23 QLogic 2,240 3,587 1,347 (163)
12 1 Juniper Networks 2,126 4,539 2,413 (427)
13 384 MEMC Electronic Mater. 2,107 2,755 648 (21)
15 286 Patterson-UTI Energy 1,883 2,652 769 (81)
17 67 Ensco International 1,843 4,363 2,521 (117)
20 108 RCN 1,737 4,369 2,632 (1,090)
23 NA JetBlue Airways 1,589 3,132 1,543 (15)
25 185 Entercom Commun. 1,547 3,052 1,505 (59)
27 49 Hispanic Broadcasting 1,520 2,843 1,323 (94)
31 141 Cephalon 1,407 3,126 1,719 23
37 43 Nextel Partners 1,328 3,005 1,677 (349)
56 137 Cox Radio 1,101 2,929 1,828 (89)
84 117 Rowan 919 2,738 1,820 (161)
99 167 Newfield Exploration 789 2,700 1,911 (21)
113 84 CheckFree 689 2,634 1,945 (350)
1495 30 Millennium Pharmac. (920) 3,684 4,604 (653)
'02 '99 Company Sales Growth (1) Performance (2)
1 7 Linear Technology 558 -4% 52
2 174 Gilead Sciences 467 176% 43
3 70 IDEC Pharmaceuticals 404 243% 28
4 47 Microchip Technology 649 42% 20
6 71 Westwood One 551 54% 49
7 157 Pixar 202 67% 98
8 111 SEI Investments 621 36% 96
9 14 Citrix Systems 527 31% 6
10 25 Mercury Interactive 400 113% 13
11 23 QLogic 411 120% 15
12 1 Juniper Networks 547 433% 16
13 384 MEMC Electronic Mater. 687 -1% 50
15 286 Patterson-UTI Energy 528 248% 57
17 67 Ensco International 698 92% 32
20 108 RCN 457 66% 10
23 NA JetBlue Airways 635 NA 49
25 185 Entercom Commun. 391 82% 47
27 49 Hispanic Broadcasting 257 30% 20
31 141 Cephalon 507 1,028% 55
37 43 Nextel Partners 671 1,950% 18
56 137 Cox Radio 421 40% 49
84 117 Rowan 617 34% 12
99 167 Newfield Exploration 662 135% 77
113 84 CheckFree 518 88% 13
1495 30 Millennium Pharmac. 353 92% 12
'02 '99 Company Risk (3)
1 7 Linear Technology 40
2 174 Gilead Sciences 92
3 70 IDEC Pharmaceuticals 96
4 47 Microchip Technology NA
6 71 Westwood One 57
7 157 Pixar NA
8 111 SEI Investments 35
9 14 Citrix Systems 94
10 25 Mercury Interactive 97
11 23 QLogic NA
12 1 Juniper Networks 98
13 384 MEMC Electronic Mater. 49
15 286 Patterson-UTI Energy NA
17 67 Ensco International 87
20 108 RCN 76
23 NA JetBlue Airways NA
25 185 Entercom Commun. 88
27 49 Hispanic Broadcasting 74
31 141 Cephalon 100
37 43 Nextel Partners 88
56 137 Cox Radio 86
84 117 Rowan 94
99 167 Newfield Exploration 95
113 84 CheckFree 96
1495 30 Millennium Pharmac. 98
Notes: All values--except for the performance and risk measures--are in
$ millions. MVA rankings are based on all Tier-1 companies. Since some
Tier-1 companies have low MVA rankings, numbers are not sequential.
(1.) Three-year cumulative aggregate sales growth.
(2.) Indicates the company's ranking for operating performance relative
to Russell 1,000 companies. The measure runs from 0 to 100. The higher
the number, the stronger the company's operating performance.
(3.) Indicates the company's ranking for risk relative to Russell 1,000
companies. The measure runs from 0 to 100. The lower the number, the
less risky the company.
Notes: All values--except for the performance and risk measures--are in
$ millions. MVA rankings are based on all Tier-2 and Tier-3 companies.
Since some Tier-2 and Tier-3 companies have low MVA rankings, numbers
are not sequential.
MVA at least offers one of the least deceptive of mirrors for companies
seeking to know whether they are the fairest of their peers.
MVA by Industry
AUTOMOBILES & COMPONENTS
Number Ticker Company name 2002
TOP 5
1 HDI Harley-Davidson 11,291
2 PCAR Paccar 3,816
3 F Ford Motor 3,459
4 RAY Raytech 2,995
5 JCI Johnson Controls 2,778
BOTTOM 5
1 GM General Motors (14,081)
2 VC Visteon (3,948)
3 GT Goodyear Tire & Rubber (3,062)
4 DCN Dana (2,279)
5 TEN Tenneco Automotive (1,237)
BANKS
Number Ticker Company name 2002
TOP 5
1 WFC Wells Fargo 24,065
2 BAC Bank of America 20,427
3 FITB Fifth Third Bancorp 14,945
4 BK Bank of New York 7,857
5 STI SunTrust Banks 6,566
BOTTOM 5
1 WB Wachovia (10,182)
2 FBF FleetBoston Financial (8,408)
3 ONE Bank One (6,577)
4 CFB Commercial Federal (568)
5 SOV Sovereign Bancorp (513)
CAPITAL GOODS
Number Ticker Company name 2002
TOP 5
1 GE General Electric 222,767
2 MMM 3M 41,012
3 UTX United Technologies 15,740
4 LMT Lockheed Martin 13,943
5 EMR Emerson Electric 13,734
BOTTOM 5
1 HON Honeywell Internatioal (9,231)
2 BA Boeing (3,871)
3 GR Goodrich (2,543)
4 RTN Raytheon (1,690)
5 WLT Walter Industries (1,262)
COMMERCIAL SERVICES & SUPPLIES
Number Ticker Company name 2002
TOP 5
1 FDC First Data 19,323
2 ADP Automatic Data Processing 13,740
3 PAYX Paychex 10,468
4 APOL Apollo Group 8,852
5 PBI Pitney Bowes 6,808
BOTTOM 5
1 AW Allied Waste Industries (1,546)
2 POI Protection One (1,043)
3 CPC Central Parking (680)
4 SCS Steelcase (551)
5 SFN Spherion (440)
CONSUMER DURABLES & APPAREL
Number Ticker Company name 2002
TOP 5
1 NKE Nike 8,906
2 COH Coach 3,559
3 LIZ Liz Claiborne 2,104
4 NVR NVR 2,123
5 LEG Leggett & Platt 1,885
BOTTOM 5
1 EK Eastman Kodak (2,947)
2 AM American Greetings (599)
3 UFI Unifi (356)
4 IFSIA Interface (301)
5 WLM Wellman (263)
DIVERSIFIED FINANCIALS
Number Ticker Company name 2002
TOP 5
1 C Citigroup 68,078
2 FNM Fannie Mae 54,181
3 FRE Federal Home Loan Mortgage 28,984
4 AXP American Express 27,539
5 SLM SLM 15,425
BOTTOM 5
1 JPM JP Morgan Chase (25,499)
2 HI Household International (5,472)
3 ET E Trade Group (1,355)
4 PVN Providian Financial (1,331)
5 NITE Knight Trading Group (806)
ENERGY
Number Ticker Company name 2002
TOP 5
1 XOM Exxon Mobil 85,108
2 APA Apache 4,387
3 BJS BJ Services 4,232
4 APC Anadarko Petroleum 4,156
5 BHI Baker-Hughes 4,126
BOTTOM 5
1 AHC Amerada Hess (2,315)
2 HAL Halliburton (555)
3 TSO Tesoro Petroleum (468)
4 ASH Ashland (415)
5 HC Hanover Compressor (370)
FOOD & DRUG RETAILING
Number Ticker Company name 2002
TOP 5
1 WAG Walgreen 24,417
2 SYY Sysco 16,667
3 WFMI Whole Foods Market 2,705
4 SWY Safeway 1,641
5 PFGC Performance Food Group 853
BOTTOM 5
1 ABS Albertsons (7,207)
2 KR Kroger (2,103)
3 3FLMIQ Fleming (2,005)
4 CVS CVS (1,667)
5 GAP Great Atlantic & Pacific Tea (749)
FOOD, BEVERAGE, & TOBACCO
Number Ticker Company name 2002
TOP 5
1 KO Coca-Cola 82,413
2 PEP PepsiCo 49,718
3 BUD Anheuser-Busch 37,916
4 MO Altria Group 28,230
5 KFT Kraft Foods 21,770
BOTTOM 5
1 RJR RJ Reynolds Tobacco Hldgs (5,406)
2 TSN Tyson Foods (1,292)
3 CQB Chiquita Brands Int' (444)
4 AOR Aurora Foods (425)
5 ADM Archer-Daniels-Midland (395)
HEALTH-CARE EQUIPMENT & SERVICES
Number Ticker Company name 2002
TOP 5
1 MDT Medtronic 40,778
2 UNH UnitedHealth Group 25,004
3 SYK Stryker 11,729
4 BSX Boston Scientific 11,599
5 HCA HCA 5,302
BOTTOM 5
1 KIND Kindred Healthcare (12,093)
2 MCK McKesson (7,852)
3 HLTH WebMD (5,155)
4 THC Tenet Healthcare (3,841)
5 SRV Service Corp. International (1,925)
HOTELS, RESTAURANTS, & LEISURE
Number Ticker Company name 2002
TOP 5
1 SBUX Starbucks 7,448
2 YUM Yum Brands 5,693
3 IGT Int'l Game Technology 5,938
4 MCD McDonald's 8,339
5 MAR Marriott International 4,361
BOTTOM 5
1 PPE Park Place Entmt (2,232)
2 WBR Wyndham International (2,028)
3 PKS Six Flags (1,168)
4 PDQ Prime Hospitality (673)
5 BFT Bally Total Fitness Hldg (486)
HOUSEHOLD & PERSONAL PRODUCTS
Number Ticker Company name 2002
TOP 5
1 PG Procter & Gamble 92,231
2 CL Colgate-Palmolive 26,687
3 G Gillette 17,738
4 AVP Avon Products 12,867
5 CLX Clorox 5,849
BOTTOM 5
1 PYX Playtex Products (94)
2 RDEN Elizabeth Arden 13
3 NATR Natures Sunshine Products 26
4 PAR Inter Parfums 53
5 ROV Rayovac 64
INSURANCE
Number Ticker Company name 2002
TOP 5
1 AIG American International Group 40,845
2 MMC Marsh & McLennan 16,133
3 AFL Aflac 12,844
4 PGR Progressive 9,283
5 ALL Allstate 7,198
BOTTOM 5
1 UNM UnumProvident (6,888)
2 PRU Prudential Financial (6,212)
3 LTR Loews (2,722)
4 NFS Nationwide Financial Services (2,707)
5 AFC Allmerica Financial (1,633)
MATERIALS
Number Ticker Company name 2002
TOP 5
1 DD DuPont 35,445
2 PX Praxair 6,836
3 DOW Dow Chemical 10,098
4 ECL Ecolab 5,393
5 APD Air Products & Chemicals 4,821
BOTTOM 5
1 CCK Crown Holdings (3,000)
2 OI Owens-Illinois (2,832)
3 MON Monsanto (2,509)
4 IGL IMC Global (2,228)
5 GP Georgia-Pacific (2,077)
MEDIA
Number Ticker Company name 2002
TOP 5
1 CMCSA Comcast 38,008
2 COX Cox Communications 15,324
3 DISH EchoStar Communications 15,076
4 GCI Gannett 13,989
5 L Liberty Media 11,658
BOTTOM 5
1 AOL AOL lime Warner (27,148)
2 CHTR Charter Communications (5,715)
3 GMST Gemstar-TV Guide Int'l (5,125)
4 IPG Interpublic Group (1,520)
5 SPOT Panamsat (784)
PHARMACEUTICALS & BIOTECH
Number Ticker Company name 2002
TOP 5
1 JNJ Johnson & Johnson 124,237
2 MRK Merck 107,076
3 PFE Pfizer 52,683
4 AMGN Amgen 57,361
5 LLY Eli Lilly 57,366
BOTTOM 5
1 MLNM Millennium Pharmac. (920)
2 ICN ICN Pharmaceuticals (782)
3 CRA Applera Celera Genomics (633)
4 ALO Alpharma (547)
5 CRXA Corixa (546)
RETAILING
Number Ticker Company name 2002
TOP 5
1 WMT Wal-Mart Stores 207,346
2 HD Home Depot 43,955
3 LOW Lowes 25,152
4 EBAY Ebay 25,489
5 TGT Target 19,698
BOTTOM 5
1 S Sears Roebuck (6,859)
2 BBI Blockbuster (4,758)
3 JCP J.C. Penney (4,557)
4 FD Federated Dept. Stores (2,506)
5 TOY Toys "R" Us (2,321)
SOFTWARE & SERVICES
Number Ticker Company name 2002
TOP 5
1 MSFT Microsoft 212,340
2 ORCL Oracle 59,502
3 ERTS Electronic Arts 6,783
4 ADBE Adobe Systems 6,450
5 INTU Intuit 5,476
BOTTOM 5
1 VRSN VeriSign (14,805)
2 ITWOE 12 Technologies (7,260)
3 EPNY E.Piphany (2,540)
4 UIS Unisys (1,800)
5 AKAM Akamai Technologies (1,786)
TECHNOLOGY HARDWARE & EQUIPMENT
Number Ticker Company name 2002
TOP 5
1 IBM IBM 90,422
2 DELL Dell Computer 69,425
3 INTC Intel 77,395
4 CSCO Cisco Systems 59,702
5 QCOM Qualcomm 17,167
BOTTOM 5
1 JDSU JDS Uniphase (35,218)
2 LU Lucent Technologies (34,657)
3 MOT Motorola (15,904)
4 GLW Corning (7,921)
5 COMS 3Com (7,873)
TELECOMMUNICATION SERVICES
Number Ticker Company name 2002
TOP 5
1 BLS BellSouth 21,787
2 VZ Verizon Communications 16,138
3 NXTL Nextel Communications 11,233
4 AT AlItel 4,312
5 PCS Sprint PCS Group 2,624
BOTTOM 5
1 T AT&T (72,674)
2 SBC SBC Communications (38,372)
3 AWE AT&T Wireless Services (7,106)
4 FON Sprint Fon Group (3,418)
5 BRW Broadwing (1,336)
TRANSPORTATION
Number Ticker Company name 2002
TOP 5
1 UPS United Parcel Service 57,036
2 LUV Southwest Airlines 8,650
3 FDX FedEx 8,558
4 EXPD Expeditors Int'l 3,435
5 CHRW C.H. Robinson Worldwide 2,691
BOTTOM 5
1 AMR AMR (2,763)
2 CSX CSX (1,431)
3 DAL Delta Air Lines (1,049)
4 UHAL Amerco (456)
5 DTG Dollar Thrifty Automotive Group (411)
UTILITIES
Number Ticker Company name 2002
TOP 5
1 SO Southern 11,817
2 D Dominion Resources 7,897
3 EXC Exelon 7,532
4 FPL FPL Group 4,900
5 PPL PPL 3,755
BOTTOM 5
1 RRI Reliant Resources (3,970)
2 EP El Paso (3,864)
3 MIR Mirant (3,863)
4 DYN Dynegy (2,695)
5 WMB Williams (2,137)
STEPHEN TAUB IS A CONTRIBUTING EDITOR OF CFO.COM.
The charts that begin on page 62 illustrate MVA and EVA results by tier (determined by size) and industry group. Due to space limitations, we present on these pages only a subset of the companies and data points covered. We urge you to check our Website, www.cfo.com, for more comprehensive results.
COPYRIGHT 2003 CFO Publishing Corp.
COPYRIGHT 2003 Gale Group