The value of reputation and your portfolio

Couple discussing the value of reputation in their stock portfolio over coffee.
Couple possibly discussing the value of reputation in their stock portfolio over coffee.

The Reputation Institute recently released their top 100 list of reputable companies for 2015. The list is based on innovation, governance, products, workplace, citizenship, leadership and performance.

Read on to discover which dividend champion received the highest reputation…

I like these types of lists, along with others such as Glassdoor’s Best Places to Work, since it’s interesting to see the public’s perception. I believe well-liked or admired companies have an implicit advantage over their competitors although it’s an intangible value, but their marketing dollars go further. I was curious to see how many stocks on the list were ones that I own, so here is a quick run-down.

So about 20% of the companies I own are included in the top 100. The list is clearly biased towards consumer-facing companies with recognizable brands – utilities and industrial companies don’t get much recognition. It’s interesting that so many European companies are included but then again, some of the German / Italian brands are very famous so it’s perhaps not too surprising.

The highest Dividend Champion, Walt Disney, comes in at number 6. The top five places are held by BMW, Google, Daimler, Rolex and LEGO.

The Biggest loser is Hershey’s who lost 23 places compared to last year.
Most Improved over last year is FedEx who gained 15 places.
And the Best Newcomer company is Estee Lauder who jumped in at 41st place.

 

Quote of the day

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.

Image courtesy of AscensionDigital at FreeDigitalPhotos.net

0 thoughts on “The value of reputation and your portfolio”

  1. An interesting list. I have never encountered it before. Glad to see there are a number of UK companies on the list (of which several I am invested in).

    I agree, companies with great reputations do really benefit from it. People are more likely to continue to trust and use them even after unfortunate events hit them. That kind of reputation is its own little economic moat (though shallower than others, of course) which should not be underestimated.

    I will have a fuller look at the list when I get a moment. See whether there are any glaring one’s I am still missing and shouldn’t be!

    Thanks for highlighting it for us.

    1. Hi D2,

      I was happy to see quite a few UK companies on the list too. I didn’t download the full pdf report yet but based on the one from 2014 I found in a web search, the full report breaks the results down by region and scoring category.

      Best wishes,
      -DL

      1. It is good to see.

        From what I gather they have limited their search to only 16 markets (mostly US and European it seems) which is somewhat focused. However, it is very useful and would like to find out more about their analysis method.

    1. Hi M,

      Sorry I missed your comment, still better late than never I guess. Yes, I was pleased to see so many UK companies there and I thought you’d be pleased about BMW too!

      Best wishes,
      -DL

  2. Like the quote! ๐Ÿ˜‰

    Very interesting to me as well. “I believe well-liked or admired companies have an implicit advantage over their competitors although itโ€™s an intangible value” –> I agree with that! It is something to consider as an investor although it’s not on my official criteria.

    Many I hold are there too.

    Cheers!

    Mike

    1. Hi Mike,

      Ha yes the quote seemed quite appropriate!

      I’ve always struggled with “Intangible assets” and “Goodwill” on a company’s balance sheet as it seemed oh so arbitrary. But I can definitely appreciate the value of a great reputation or just being an admired company, even if it’s hard to put a number on it.

      Best wishes,
      -DL

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