Wal-Mart is America's 'Most Admired Company'

FORTUNE has announced that Wal-Mart, the retail giant, is ranked as number one on the magazine's annual survey of Most Admired Companies, marking the first time in the survey's 21-year history that the nation's largest company is also its most admired.

As striking as Wal-Mart's rise is the fall of General Electric, which held the number one spot for the past five years. This can be attributed in part to Wall Street's increasing impatience with opaque financial statements after the demise of Enron, as well as the very public breakup of former CEO Jack Welch's marriage.

Rounding out the top ten are Southwest Airlines (No. 2); Berkshire Hathaway (No. 3); Dell Computer (No. 4); General Electric (No. 5); Johnson & Johnson (No. 6); Microsoft (No. 7); FedEx (No. 8); Starbucks (No. 9); and Procter & Gamble (No. 10).

The three other companies ousted from this year's list - Intel, Home Depot and Citigroup - have also taken hits. 'Chipmaker Intel, facing the worst slump in the history of the PC industry, earned $3.1 billion last year-ahead of 2001 but down 70% from 2000,' says Stein, author of the survey. 'The company's shares have declined 80% from their 2000 high of nearly $75. At Home Depot, where once-sizzling growth has slowed, the stock lost 52% of its value in 2002, the largest drop of any company on the Dow. As for Citigroup, its reputation was tarnished when the company was fined $400 million last year after being implicated in the industry-wide scandal over conflicts of interest between investment banking and research divisions.'

The total return of the ten Most Admired Companies in 2002 was down 8.63%-more than 13% higher than the total return on the S&P 500. Furthermore, the top ten won the business world's regard by refocusing attention where it counts the most: on customers and employees. FORTUNE's Most Admired Companies issue also ranks companies by industry. For these rankings, the Hay Group took the ten largest companies by revenues in 66 industries, including large subsidiaries of foreign firms. They surveyed 10,000 executives, directors, and securities analysts who rated the companies in their industries using eight criteria (social responsibility, innovation, long-term investment value, use of corporate assets, employee talent, financial soundness, quality of products/services, and quality of management).

To create the top ten list, the Hay Group asked respondents to select the ten companies they admired most in any industry, based on a list of companies that ranked in the top 25% in last year's survey, as well as companies that ranked below the first quartile overall but finished in the top 20% of their industry. Thus a company could score high on its industry list but not make the list of ten Most Admired Companies.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.