For the seventh straight year in a row, the Commerce Department’s National Institute of Standards and Technology (NIST) has conducted a stock performance study of the Malcolm Baldrige National Quality Award winners. And for the seventh straight year in a row, the investment study has concluded that the Baldrige group stock has outperformed the S&P 500 – this year by 4.4 to 1.
Here’s how the fictitious Baldrige Index and stock investment study was conducted:
- Index includes the publicly traded U.S. companies that won the Malcolm Baldrige National Quality Award between 1990 and 1999.
- NIST invested a hypothetical $1,000 in each of the winners.
- NIST also invested another hypothetical $1,000 in the S&P 500.
- Investments were tracked from the first month following the award announcement through December 1, 2000.
- Adjustments were made in the case of stock splits.
Results For The Past Seven Years:
- 2001: Baldrige outperforms S&P 500 4.4 to 1
- 2000: Baldrige outperforms S&P 500 almost 5 to 1
- 1999: Baldrige outperforms S&P 500 2.6 to 1
- 1998: Baldrige outperforms S&P 500 almost 3 to 1
- 1997: Baldrige outperforms S&P 500 3.5 to 1
- 1996: Baldrige outperforms S&P 500 4 to 1
- 1995: Baldrige outperforms S&P 500 6.5 to 1
Other Studies Have Concluded With Similar Results
Other studies have indicated similar results. A joint study between the Georgia Institute of Technology and the University of Western Ontario found that quality award (including Baldrige) recipients experienced a 44 percent higher stock price return, a 48 percent higher growth in operating income, and a 37 percent higher growth in sales that a control group with similar size and industry standing. Other notable benefits included improvement in employment, and higher return on sales and asset growth.
Source: National Institute of Standards and Technology