Market pressures can drive companies to innovate, but corporate innovation can also drive market value. One of the biggest drivers in how the market rewards companies and drives their stock prices higher is how well they can sustain innovation and invest in that innovation. Across industries, as companies successfully innovate, valuations tend to move higher. By identifying the companies the market is rewarding for continued success in innovation, we might be able to understand what kind of companies the market will reward in the future.
The GIM Institute (GIMI) and Valens Research worked together on this piece, leveraging GIMI’s deep insights in innovation and Valens knowledge of the UAFRS framework and corporate performance and valuation to identify great innovators who the market is rewarding for their innovation. We’ve found 10 unique companies across the global corporate universe that are worthy of highlight.
We identified these companies using a multi-step process:
- Identified firms with an excellent history of innovation, in products, processes, creating new markets and other areas.
- Reviewed that universe of companies to see which companies have been able to generate value in terms of innovation based on their UAFRS-adjusted Return on Assets (ROA) being well above their required rate of returns for a multi-year period of time.
- Verified those companies continued to invest in innovation and to grow, as identified by rapid investment in UAFRS-adjusted Asset growth into high ROA businesses.
- Identified which of those companies the market was rewarding for their innovation with premium valuations.
To read more about GIMI and Valens and the processes we use to analyze companies, read at the bottom of the article.
Below are the 10 unique companies