Asian firms dominate BCG's annual large-cap value creator's list

15 July 2019 Consultancy.asia

Boston Consulting Group has identified the top performing companies for the past year, with Asian firms creeping up the list.

Global management consulting leader Boston Consulting Group has released its 2019 ‘Value Creators’ list, which ranks stocks based on total shareholder return over the past five years. And while US firms continue to dominate the pointy end for large-cap companies – taking seven of the top ten slots – BCG’s analysis reveals that Asian firms now occupy more than half of the top hundred spots.

Now into its 21st edition, the annual BCG analysis measures average total shareholder return (TSR) at approximately 2,250 companies worldwide over the previous five-year period, arriving at a global top 200 and, this year, the top ten in 33 different industry sectors. Topping the overall list this year was US tech company NVDA, which delivered an average TSR of over 54 percent across the last five years.

Following NVDA, from third to seventh, were a swag of US tech firms all bringing total five-year shareholder returns upwards of 30 percent, including, in order; Broadcom, Netflix, Adobe, Amazon, and med-tech firm Intuitive Surgical. Splitting them however, was Chinese consumer nondurables firm Kweichow Moutai, in second with a market cap of ~$108 billion and a five-year TSR of 43.5 percent.

Top ten large-cap companies for shareholder returns

Bringing up the rear, in 9th at a massive market cap of $379.1 billion and TSR over the period just shy of 30 percent, was Tencent Holdings, with Russian oil player Lukoil rounding out the top ten. The real story however wasn’t the Chinese incursion into the top ten – last year’s top ten featured Tencent and Kweichow Moutai along with Japanese firms Sony and Keyence – but the overall Asian charge.

This year, five of the top twenty companies are based in Asia. This, the firm says, together with a further eleven of bracket originating from North America, in part reflects the disproportionate number of North American and Asian companies that rank among the largest companies by market capitalisation, at around slightly over one-third each of the overall sample. US companies however dominate the top 200 by this measure, at one half compared to one fifth for Asia.

Yet, taking the top 100 performers by TSR, a massive 55 percent are Asian while only 28 percent are North American – with similar results when looking at the 330 companies which rank in the top 10 of their given industries, 45 percent being Asian against 29 percent North American. “Asian companies are catching up to, and in some cases surpassing, their longer-established US counterparts in value creation,” says Alexander Roos, a BCG senior partner.

Among sectors, companies in the health care sector led all-comers, with a median annual TSR of 17 percent, followed closely by the Medtech and infrastructure sectors, while other top performing Asian companies included China Yangtze Power (11th, up from 50th), Sony (which dropped from 7th to 16th) and China Merchants Bank, which hasn’t ranked for the seven years but lands at 21st. Meanwhile, the biggest-name sliders this year were Tesla, which dived from 3rd to 43rd, and Facebook, falling from 6th to 33rd.