How The 30 Famous Firms In The Dow Do—Or Don’t—Create Value

Core Insights - The article emphasizes the importance of mastering three value-creating principles to avoid becoming a value-destroying entity, highlighting that firms focused on stakeholder value tend to generate more profit than those solely focused on profit [2][3] Evaluation of Firms in the DJIA - The 30 firms in the Dow Jones Industrial Average (DJIA) were assessed based on three value principles, with scores ranging from 1 to 5, and these scores were correlated with their 10-year total return (TSR) [4] Consistent Losers - Boeing received an overall score of 5.1 out of 15, with a TSR of 78% compared to the S&P 500's 234%, indicating significant underperformance due to safety issues and bureaucratic challenges [5] - 3M scored 6.7 out of 15, with a TSR of 89% versus the S&P 500's 234%, suffering from inefficiencies in innovation and industrial bureaucracy [5] Mixed Performers - Caterpillar scored 6.2 out of 15, achieving a TSR of 673% against the S&P 500's 234%, indicating a strong performance despite challenges in customer value and operational hierarchy [7] - Sherwin-Williams scored 9.5 out of 15, with a TSR of 389% compared to the S&P 500's 234%, showing a balance of quality and adaptability [7] Consistent Winners - Microsoft achieved the highest score of 14.0 out of 15, with a remarkable TSR of 1246% against the S&P 500's 234%, demonstrating exceptional customer value and adaptive mindsets [10] - Nvidia also scored 14.0 out of 15, with an astonishing TSR of 31,318% compared to the S&P 500's 234%, reflecting its leadership in AI hardware and rapid adaptation to market demands [10] - Apple scored 13.5 out of 15, with a TSR of 803% against the S&P 500's 234%, showcasing its innovative ecosystem and strong customer focus [10]