Study. In the ranking of the 100 best listed companies, the climbers come from the health care sector. In Austria, the cartonboard manufacturer Mayr-Melnhof is at the top.

Vienna. Austrian Post loses its top position as the best company. It is replaced by the cardboard manufacturer Mayr-Melnhof. At least that is the view of the experts at Swiss asset manager H’erens Quality Asset Management (HQAM), which has been presenting Excellence Awards to the world’s best-quality companies every year since 2010. The awards are given to companies that, thanks to good management, generate a sustainably high return on capital and are solidly financed. Criteria such as return on capital employed, equity ratio, or debt-equity ratio are used to determine this.

Profitability convinces

For example, the study authors praised the high financial strength of Austrian Post in the past two years. But now Mayr-Melnhof convinces with high profitability and an excellent customer base. Customers of Europe’s largest producer of coated recycled cartonboard and folding cartons include Mars, Nestle, P&G, Unilever and McDonald’s. The Vienna-based group is two and a half times the size of its next largest competitor. The ownership structure of the family business also ensures “stability and excellent company management.” As an industrial company, Mayr-Melnhof is the exception in the ranking. This is clearly dominated by the IT sector. But the new up-and-comers come from the healthcare sector, such as the national winner from Japan, Hoya, a special lens manufacturer, or Cochlear from Australia, which produces hearing prostheses, and the Danish pharmaceutical group Novo Nordisk. Medistim from Norway specializes in devices for cardiac and vascular surgery, and Revenio from Finland produces instruments for bone densitometry, among other things.

The financial sector is on the decline. Among the 100 worst stocks, the balance sheet-heavy sector predominates. It is therefore all the more astonishing that the American financial services provider SEI Investments was able to maintain its position as the world’s best quality stock. The Pennsylvania-based company offers asset managers in-house services such as fund administration, reporting, transaction processing and compliance, and is benefiting from the fact that banks are outsourcing more and more activities to external providers for cost reasons.

Corporate Excellence Award 2020 – The best listed companies

Because the success of the company depends on the development of the financial markets, the corona-induced sell-off has also dragged down the securities of SEI Investments. Despite the expected decline in profits, the stocks are cheap. The price-earnings ratio (P/E) for 2021 is 17 (denotes the number of years in which the company would have earned its market value if profits had remained constant).

Only the shares of NCSoft are trading at an even greater discount to their own valuation history: The online game developer has a large fan base in Korea, is looking to expand into China and Southeast Asia, and expects high earnings growth.

Successful war games

On the other hand, Games Workshop from the UK, which sells board games with fantasy characters, stands out with the highest premium. The titles are traded at a P/E ratio of 31. Its core business is the war game “Warhammer 40,000,” in which players assemble their own figures. Games Workshop sells the kit as well as glue, paints, brushes and other accessories. According to Wikipedia, a new player has to spend at least 300 pounds to have enough figures.

In addition, Games Workshop grants licenses, which should be the main source of income in the future. But quality is no guarantee for a good investment. If a share is too expensive, its price performance can be disappointing, even if the company’s operations are excellent. This is shown by the example of the European serial winner Rational. The kitchen manufacturer from Bavaria is the world market leader for customized commercial kitchens ordered by restaurants, canteens, hospitals, homes, prisons and cruise ships. It has been growing highly profitably for years. However, due to the corona-induced standstill, 2020 is threatened with a drop in profits for the first time since 2011. Since peaking in January, the shares have lost 30 percent. But in difficult times, a strong balance sheet helps, and the company has one. It is debt-free.

MADLEN STOTTMEYER