Investors rely on different benchmarks to measure corporate success. Some value the quality of a company’s product line. Others prize a company for its philanthropic outreach. Still others gauge a company’s success by its ability thrive over the long haul. This article considers a combination of traits to identify some of the most successful American businesses. Although they straddle various sectors, all of them are found on the S&P 100 -- a bellwether index for the largest and most well-established companies.
- Investors rely on different benchmarks to measure corporate success, such as a company’s longevity, its product line, and its philanthropic outreach.
- Based on a combination of traits, the following companies emerge as some of the top American corporate success stories:
- J.P. Morgan Chase & Co.
Founded in 1994, Amazon.com (AMZN) is the undisputed king of internet retailers. It has changed the shopping habits of the masses, and cannibalized large chunks of business from brick-and-mortar retailers, causing most big box stores to roll out online platforms of their own, in a bid to remain competitive. With a $2.44 share price at the time of its 1997 initial public offering, Amazon’s stock has since soared in value, trading for a whopping $1,911.52, on May 1, 2019. Over the past five years, Amazon ranks third for the total return performance in the S&P 100, with an annualized return of 40.78%.
Founded on April 1, 1976, Apple introduced the world to prominent executives such as Steve Jobs and Tim Cook—both of whom have been instrumental in the tech giant’s global success. In 2018, Apple announced its highest annual revenue to date, with a staggering $265.6 billion. Approximately $218 billion of that revenue (82%) may be attributed to the success of the iPhone, which sold 216.76 million units in fiscal year 2017. This represents a significant spike from the 150 million units sold in 2013 and the 40 million units sold in 2010. Apple has also shown impressive sales of the iPad, which accounted for nearly 7% of its global revenue in the first quarter of 2018. But its global tablet shipments have declined in recent years, due to competition from other tablet makers like Samsung and Lenovo. However, Apple still has strong sales with other products, including Apple Watches, Apple TVs, and iPods. Apple also has a strong retail presence, with more than 500 brick-and-mortar stores across the globe.
A rising star over the past decade, semiconductor manufacturer Nvidia has led the S&P 100 in three year annualized total returns, with a gain of 108.63%. It also posts a ten-year annualized return of 42.66%. This technology player boasts a market cap of $144 billion and has the free cash flow to support its continuing growth. In fact, as of Oct. 2018, it had the free cash flow to revenue ratio of 20.83%, and a three-year annualized revenue growth is 27.4%, with a trailing 12-month growth margin of 62%. Headquartered in Santa Clara, California, Nvidia’s primary business focuses on manufacturing and development of graphics processing units (GPUs), central
processing units (CPUs), chipsets and drivers for companies all over the world.
J.P. Morgan Chase & Co (JPM), one of the oldest companies in America, has been operating since 1799, and is one of the largest financial institutions in the world, with annual managed revenues of $105 billion through October 2018. The firm has achieved its leading status by maintaining strong balance sheets, robust risk control, and abundant liquidity while focusing on maximizing long-term shareholder value. The firm boasts one of the highest returns on assets in the financial sector, at 1.01%. It has a committed dividend payout ratio of 30% and a forward dividend yield of 2.87%.
Operating since 1975, Microsoft has been capably led by founder Bill Gates and current
chief executive officer Satya Nadella. Its revenues were over $110 billion in 2018, representing a 14.28% revenue growth, and a five-year annualized gross margin average of 64%. The company reports a three-year annualized return of 32.91% and a five-year annualized return of 27.05%. It is also committed to environmentally sustainable and green technology efforts, spearheading a vast range of causes across the world.
The Bottom Line
There are many well-known American companies, but these five iconic globally prominent brands lead the pack if success is measured by societal benefits, shareholder value, shrewd management, and longevity.