We hear it all the time, that big companies have economies of scale, but size is no guarantee of success — whether competing in a single country or around the world. If anything, as companies increase in size and complexity, it becomes tougher to expand at a rapid pace.
We did a careful search of the Forbes Global 2000 — our list of the world's largest companies based on a composite ranking of sales, profits, assets and market value — to find big companies that aren't just ponderous behemoths but are global superstars in every sense. These fast-growing, adroit and well-managed companies help set the benchmarks for their respective industries.
To find the winners we limited our universe to Global 2000 companies based in the U.S. or foreign firms that trade here, either as regular shares or as American Depositary Receipts. We required companies to have at least $1 billion in sales and a share price of at least $5.
We then compared all of the survivors against industry peers in long- and short-term return on equity, sales growth, profit growth, return to shareholders and other financial metrics.
Once we generated our industry-specific rankings, we scrutinized each list and handpicked the top five in each industry. We took into consideration long-term earnings growth forecasts from Thomson ibes, and we turned to Audit Integrity to help us cull companies with potential problems with accounting, earnings quality or corporate governance. Standard & Poor's NetAdvantage and the Value Line Investment Survey also provided useful insight in helping us eliminate companies.
Finally, our editors dropped companies that had legal or other challenges that might impede future growth.
Out of 1,200 companies, only 130 made the final cut. Our list contains familiar names, such as Starbucks, Nvidia, Google and Honda, and some surprises. One example, ASML Holding, a $4.7 billion (revenues) maker of semiconductor manufacturing equipment, headquartered in the Netherlands.
Over the past five years this company turned in annualized sales growth of 23 percent. Security analysts think that ASML can deliver 17 percent annualized per-share earnings growth over the next three to five years.
