The companies in the S&P 500, which was the starting point for our research, represent a huge universe--some 75% of the market capitalization of all U.S. stocks. We ran our proprietary data screens on these companies, then vetted the list with a board of BusinessWeek editors and correspondents to get the insights and commonsense judgments that purely financial measures can't provide. That process resulted in our list of 50 companies playing at the top of their game. We then extended the list to include the next 25 companies that made it through the vetting process. Dive in.
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PROFITABILITY For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholders' equity.
SALES GROWTH RATE Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
MARKET VALUE Share price on Feb. 28, 2007, multiplied by the latest available common shares outstanding.
TOTAL RETURN (1-YEAR ) Annual dividend per share, reinvested, plus Feb. 28, 2007, share price, as a percent of Feb. 28, 2006, share price.
TOTAL RETURN (3-YEAR )
Annual dividend per share, reinvested, plus Feb. 28, 2007, share price, as a percent of Feb. 27, 2004, share price.
SALES Latest available sales through the most recent 12 months. Includes all sales and other operating revenues. For financial service companies, this includes interest and noninterest income; for banks, it includes revenues for all banking operations.
PROFITS Latest available profits through the most recent 12 months. Net income from continuing operations before extraordinary items.
GRADES The overall sector letter grade reflects how the weighted average of the ranked return on capital and ranked sales growth compares with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only. Some grades were adjusted for the small size of the sector
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