Results of 1988-1996 Baldrige Award Recipients' Common Stock Comparison

Methodology:

A hypothetical sum was invested in each of the 1988-1996, publicly-traded Baldrige Award recipient's common stock, in the year they applied for the Award. The investment was tracked from the first business day of the month following the announcement of the Award recipients, (or the date when they began public trading, if it is later) through December 1, 1997. $1,000 was invested in each whole company, and for subsidiaries the sum invested was $1,000 multiplied by the percent of the whole company's employee base the subunit represented at the time of its application. The same total dollar amount was invested in the Standard & Poor's (S&P) 500 on the same day. If a subunit was sold to another parent company, or if a company divested, it was the subunit whose progress was followed, not the parent company's. The value of the original stock at the time of sale was determined and that dollar amount was reinvested in the new parent company.

Adjusting for stock splits, the value on December 1, 1997 was calculated. Information is reported two ways: all publicly-traded Award recipients and only whole company Baldrige Award recipients. The 18 publicly-traded Award recipients, as a group, outperformed the S&P 500 by approximately 2.4 to 1, achieving a 362.3% return compared to a 148.3% return for the S&P 500. The group of six, publicly traded, whole company Award recipients outperformed the S&P 500 by 2.7 to 1, achieving a 394.5% return compared to a 146.9% return for the S&P 500. A summary of the results follows.

1988-1996 Publicly Traded Award Recipients

1988-1996 Publicly Traded Whole Company Award Recipients

Results of 1990-1996 Baldrige Site Visited Applicants Common Stock Comparison

Methodology:

A hypothetical sum was invested in each 1990-1996 publicly-traded, site visited applicant's common stock in the year they applied for the Award. The investment was tracked from the first business day of the month following the announcement of the Baldrige Award recipients (or the date when they began public trading, if it is later) through December 1, 1997. $1,000 was invested in each whole site visited company, and for subsidiaries, the sum invested was $1,000 x the percent of the parent company's employee base the subunit represented at the time they were site visited. The same total dollar amount was invested in the S&P 500 on the same day. (Award recipients are among the pool of site visited applicants, but are not considered in all cases.)

Adjusting for stock splits, the value on December 1, 1997 was calculated. Information is reported four ways: all publicly-traded site visited applicants, all whole company site visited applicants, and each of those groups without the winning companies included. (Note: a company may be included multiple times if they received more than one site visit.)

The 52 publicly-traded site visited applicants, as a group, outperformed the S&P 500 by approximately 80%, achieving a 216.0% return compared to a 118.7% return for the S&P 500. The group of ten whole company site visited applicants outperformed the S&P 500 by almost 80%, achieving a 206.1% return compared to a 118.6% return for the S&P 500. The group of 37 site visited applicants without the winners outperformed the S&P 500 by approximately 35%, achieving a 157.6% return, compared to a 116.4% return for the S&P 500. The five whole company site visited applicants without the winners did not outperform the S&P 500. Names of Baldrige applicants are kept confidential. A summary of the results follows.

1990-1996 Publicly Traded Site Visited Award Applicants

1990 - 1996 Publicly Traded Whole Company Site Visited Award Applicants

Award Recipients Included in the Stock Study
(Those not included were not publicly held at the time of the study)

Whole Company Winners:

ADAC Laboratories
Eastman Chemical Company
Federal Express Corporation
Motorola, Inc.
Solectron Corporation
Zytec Corporation (now Artesyn Technologies)

Subunit Award Recipients:
(The sum invested was $1,000 x the % of the parent company's employee base that the subunit represented at the time they applied)

Armstrong World Industries, Inc. - Building Products Operations
AT&T Consumer Communication Services (now part of the Consumer Markets Division of AT&T)
AT&T Network Systems Transmission Systems Business Unit (now part of Lucent Technologies, Inc., Optical Networking Group)
AT&T Univeral Card Services Cadillac Motor Car Company (part of General Motors)
Corning Incorporated Telecommunications Products Division
Dana Commercial Credit Corporation
GTE Directories Corporation
IBM Rochester, AS/400 Division
Texas Instruments Incorporated - Defense Systems & Electronics Group (now part of Raytheon Systems Company)
Westinghouse Electric Corporation Commercial Nuclear Fuel Division Xerox Corporation Business Products & Systems




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Date created: 2/1/1997
Last updated: 9/19/2001