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Baldrige Index Stock Study


Results of 1988-1998 Baldrige Award Recipients
Common Stock Comparison

Methodology:

A hypothetical sum was invested in each of the 1988-1998, publicly-traded Baldrige Award recipient's common stock, in the year they applied for the Award. The investment was tracked from the first business day of the month following the announcement of the Award recipients, (or the date when they began public trading, if it is later) through December 1, 1999. $1,000 was invested in each whole company, and for subsidiaries the sum invested was $1,000 multiplied by the percent of the whole company's employee base the subunit represented at the time of its application. The same total dollar amount was invested in the Standard & Poor's (S&P) 500 on the same day. If a subunit was sold to another parent company, or if a company divested or merged, it was the subunit whose progress was followed, not the parent company's progress. The value of the original stock at the time of sale was determined and that dollar amount was reinvested in the new parent company.

Adjusting for stock splits, the value on December 1, 1999 was calculated. Information is reported two ways: all publicly-traded Award recipients and only whole company Baldrige Award recipients. The 24 publicly-traded Award recipients, as a group, outperformed the S&P 500 by approximately 3.8 to 1, achieving a 841.29% return compared to a 221.55% return for the S&P 500. The group of six, publicly traded, whole company Award recipients outperformed the S&P 500 by 4.8 to 1, achieving a 1100.727% return compared to a 227.56% return for the S&P 500. A summary of the results follows.

1988 - 1998 Publicly Traded Award Recipients

  $ Investment $ Value - 12/1/99 Change
1988-1998 Award Recipients 8,883.31 83,617.73 841.29%
S&P 500

8,883.31

28,564.67 221.55%


 

1988 - 1998 Publicly Traded Whole Company Award Recipients

  $Investment $ Value-12/1/99 Change
1988-1998 Whole Company Award Recipients 6000 72,043.00 1100.72%
S&P 500

6000

19,653.85 227.56%



Results of 1990-1998 Baldrige Site Visited Applicants
Common Stock Comparison

Methodology:

A hypothetical sum was invested in each 1990-1998 publicly-traded, site visited applicant's common stock in the year they applied for the Award or in the year they became public. The investment was tracked from the first business day of the month following the announcement of the Baldrige Award recipients (or the date when they began public trading, if it is later) through December 1, 1999. $1,000 was invested in each whole site visited company. For subsidiaries, the sum invested was $1,000 x the percent of the parent company's employee base the subunit represented at the time they received a site visit or at the time they became public as a result of a merger or acquisition by a new parent. The same total dollar amount was invested in the S&P 500 on the same day.

Adjusting for stock splits, the value on December 1, 1999 was calculated. Information is reported four ways: all publicly-traded site visited applicants, all whole company site visited applicants, and each of those groups without the winning companies included. (Note: a company may be included multiple times if they received more than one site visit.)

The 70 publicly-traded site visited applicants, as a group, outperformed the S&P 500 by approximately 2 to 1 achieving a 351.52% return compared to a 174.68% return for the S&P 500. The group of 14 whole company site visited applicants outperformed the S&P 500 by almost 2.2 to 1, achieving a 390.71% return compared to a 180.23% return for the S&P 500. Names of Baldrige applicants are kept confidential. A summary of the results follows.

1990 - 1998 Publicly Traded Site Visited Award Applicants

  $ Investment $ Value-12/1/99 Change
1990-1998 Site Visited Applicants 24,335.44 109,879.60

351.52%

S&P 500

24,335.44

66,845.11 174.68%


 

1990-1998 Publicity Traded Whole Company Site Visited Award Applicants

  $ Investment $ Value - 12/1/99 Change
1988-1998 Whole Company Site Visited Applicants 14000 68,698.78 390.71%
S&P 500 14000 39,232.22 180.23%



AWARD RECIPIENTS INCLUDED IN THE STOCK STUDY
(Those not included were not publicly held at the time of the study)

Whole Company Award Recipients

ADAC Laboratories
Eastman Chemical Company
Federal Express Corporation
Motorola, Inc.
Solectron Corporation (1991 and 1997)

Subunit Award Recipients (with parent company)
(The sum invested was $1000 x the % of the parent company's employee base that the subunit represented at the time the subunit applied.)*

3M Dental Products Division (1997)
3M

Armstrong Building Products Operations (1995)
Armstrong World Industries, Inc.

AT&T Consumer Communication Services (1994)
Consumer Markets Division of AT&T

AT&T Network Systems - Transmission
Systems Business Unit (1992)
Lucent Technologies, Inc., Network Systems

AT&T Universal Card Services (1992)
Citigroup, Inc.

Boeing Airlift and Tanker Programs (1998)
The Boeing Company

Cadillac Motor Car Company (1990)
General Motors

Corning Telecommunications Products Division (1995)
Corning Incorporated

Dana Commercial Credit Corporation (1996)
Dana Corporation

GTE Directories Corporation (1994)
GTE Corporation

IBM Rochester, AS/400 Division (1990)
IBM Corporation

Merrill Lynch Credit Corporation (1997)
Merrill Lynch & Co.

Solar Turbines Incorporated (1998)
Caterpillar Inc.

Texas Instruments Incorporated - Defense Systems & Electronics Group (1992)
Raytheon Company

The Ritz Carlton Hotel Company (1992) (First included in 1997 study)
Marriott International *(Ritz Carlton became public when it was acquired by Marriott International. The sum invested was based on the sum of Marriott's employee base.)

Xerox Business Products & Systems (1989)
Xerox Corporation

Xerox Business Services (1997)
Xerox Corporation

Zytec Corporation (1991)
Artesyn Technologies *(As of 12/29/97 Zytec Corporation merged with Computer Products and formed Artesyn Technologies. Dollars invested in Zytec were carried forward into Atesyn with a 1.33 split multiplier.)


 

NIST 1999 Stock Study of Malcolm Baldrige
National Quality Award Recipients

  Stock Purchases December 1, 1999 Close
Date of Investment

Whole Company Recipient or Parent (Subsidiary Recipient)

Price     

$Invested

Price

 $ Value %Change

12/1/88

Motorola

38.125

1000.00

116.9375

12268.85

1126.89

11/2/89

Xerox (Business Products and Systems)

57.875

790.00

26.5

2170.37

174.73

11/1/90

General Motors (Cadillac Motor Car Division)

36.875

13.39

72.4375

26.30

96.44

11/1/90

Federal Express Corporation

33.375

1000.00

41.375

4958.80

395.88

11/1/90

IBM (IBM Rochester)

107.25

17.62

103.75

68.18

286.95

11/1/91

Solectron

28.25

1000.00

86.75

49132.74

4813.27

11/2/92

CitiGroup (AT&T Universal Card Services)

44.125

6.53

54.4375

44.38

579.57

11/2/92

Lucent (AT&T Transmission Systems Business Unit)

44.125

37.54

77.25

384.62

924.55

11/2/92

Raytheon (Texas Instruments DSEG)

49.375

246.61

30.4375

542.47

119.97

11/11/93

Artesyn (Zytec)

10.5

1000.00

21.625

7349.81

634.98

1/3/94

Eastman Chemical

45.125

1000.00

38.8125

860.11

-13.99

11/1/94

AT&T (AT&T Consumer Communications Services)

54.5

159.26

54.8125

308.62

93.79

11/1/94

GTE (GTE Directories)

30.5

41.88

74.25

101.95

143.44

11/1/95

Armstrong World Industries (Building Products Operations

58.875

118.25

33.125

66.53

-43.74

11/1/95

Corning Incorporated (Corning TPD)

25.75

36.41

96.75

159.91

339.19

11/1/96

ADAC Laboratories

20.875

1000.00

12.06

577.84

-42.22

11/1/96

Dana (Commercial Credit)

29.875

11.27

28

10.56

-6.28

11/3/97

3M (Dental Products Division)

92.1875

9.90

94.4375

10.14

2.44

11/3/97

Merrill Lynch (Credit) 

69.75

16.51

79.875

18.90

14.52

11/3/97

Solectron  

40.875

1000.00

86.75

4244.65

324.46

11/3/97

Xerox (Business Services)

79.875

149.54

26.5

99.23

-33.65

3/30/98

Marriott (The Ritz Carlton Hotel)

35.94

96.53

33.125

88.97

-7.83

12/1/98

Boeing (Airlift & Tanker Programs)

40.375

36.91

41.32

37.78

2.34

12/1/98

Solar Turbines, Inc.

51.94

95.16

46.9375

86.00

-9.63

Totals

Baldrige Award Recipients

 

8883.31

 

83,617.73

841.29

S&P 500   8883.31   28,564.67 221.55