Here are the latest results for the Engaged Company Stock Index, which tracks the long-term results of companies with high levels of customer, employee, and community engagement as determined by independent data sources compiled by McBassi & Company. Scroll down for a list of the companies and the methodology for the Index.
The results below reflect the stock market performance of the Engaged Company Stock Index from October 1, 2012 to Nov 30, 2017.
October 1, 2012 to Nov 30, 2017
|Good Companies:||S&P 500 (including dividends):|
The Engaged Company portfolio has outperformed the S&P 500 (including dividends) by 36.2 percentage points since October 1, 2012.
The Good Company portfolio includes 47 companies with combined high scores as employers, sellers, and stewards of the community and environment. Tracking of the portfolio began on October 1, 2012. The composition of the portfolio is periodically updated (most recently on January 31, 2017), based on new data from the Good Company Index.
Cognizant Technology Solutions
Johnson & Johnson
Starwood Hotels & Resorts
Whole Foods Market
The Enterprise Engagement Alliance Engaged Company Stock Index was created to draw attention to the compelling connection between an organization’s performance in the stock market and its relationships with customers, employees, and communities. The EEA Engaged Company Stock Index uses the Good Company Index developed by Human Analytics leader McBassi & Co., to track organizations based on their business practices as sellers, employers, and stewards of communities and the planet.
Among the big winners in the portfolio over the last year have been Intel, General Mills, and Johnson & Johnson. Companies that have dragged down performance include consumer companies Nordstrom and L Brands.
The EEA Engaged Company Stock Index, released on Oct. 1, 2012, is tracking over time the stock performance of approximately 30 companies with high customer, employee, and community engagement scores against the performance of the S & P 500 average. Like other stock indices, the EEA Engaged Company Stock Index provides a cumulative score that can be easily compared over time with other indices.
McBassi’s Engaged Company Index uses the metrics outlined in the book, Good Company: Business Success in the Worthiness Era, that gives companies letter grades, with the best companies getting an A, and poor companies getting Ds and Fs.
To study the impact on stock market performance, McBassi examined pairs of companies in the same industry in the Fortune 100 in which the companies’ Engaged Company grades differed by one or more full grade levels (for example, a grade of B versus a grade of C) over a two-year period.
Across the twelve pairs of companies that met this criterion, the stock price of the company with the higher grade outperformed that of its competitor with the lower grade by an average of 30.2 percentage points over the two-year period following the assignment of Engaged Company grades (an average annualized outperformance of over 14 percentage points).
Those companies with higher Engaged Company grades significantly outperformed in the first year and then further extended that outperformance in the second year. In addition, in 83 percent of the pairs (10 of 12), the higher-ranked company outperformed the other over the 24-month period.
For example, the stock value of IBM (Engaged Company grade of B+) increased by a cumulative 58.4 percent during the two-year period, compared to a decrease of 53.4 percent in Hewlett Packard (grade of C) over the same time, for a 111.8 percentage point outperformance for IBM. Similarly, Verizon (grade of C+) outperformed AT&T (grade of D+) by 21.7 percentage points during that period, 76.5 percent to 54.8 percent.
The Engaged Company Stock Index only tracks companies with high engagement, because there have been too many mergers, acquisitions, and other changes among the companies with low engagement scores to provide a predictive base of companies to track.