NEW YORK: Salesforce, Amazon and Tencent are among the companies enjoying an "innovation premium" thanks to their successful R&D activities, new research has argued.
A study from Jeff Dyer, a professor at the Marriott School of Management, Brigham Young University, and Hal Gregersen, a senior affiliate professor at INSEAD, named 100 major businesses that had an innovation premium, Forbes reported.
Their list was based on the gap between a firm's stock market valuation and the actual cash flows attributable to its product portfolio. A positive difference favouring the first of these figures was thought to indicate investor confidence about innovation-led increases in future earnings.
Salesforce, the social enterprise services group, headed the charts with a stock price that is 75% greater than could be justified purely by its cash flow alone, the analysis found.
Marc Benioff, the CEO of Salesforce – which has logged an average revenue increase of 39.5% in the last five years, when its net income has expanded by 78.7% annually – recently said the firm will aim to replicate the success of Facebook inside companies.
"Facebook is becoming a vision ... of what a consumer operating system is," he said. "When I look at Facebook, it is a tremendous direction for where we are going as an industry."
Amazon, the online retailer, claimed second in the innovation rankings, with a stock market valuation of $92.7bn, 58.7% beyond the figure its cash flow would dictate.
Taking third place was Invasive Surgical, which has pioneered the use of robotically-assisted technology to improve medical procedures. Investors value the organisation at $13.4bn, an "innovation premium" of 57.6%.
Fourth position went to Tencent, the web company, priced at $46.5bn on the stock market, 52.3% higher than its cash flow would allow. The Chinese firm launched an English-language microblog this month, suggesting increasingly international ambitions.
Apple, the electronics firm, is one of the world's largest corporations. Its market capitalisation of around $303bn is equivalent to an innovation premium of 48.2%
"We've had a series of unbelievable products that we believe are the best products in the world, and our customers tell us that, which is more important than us saying it," Tim Cook, Apple's CEO, said last week. "We've got a pipeline that's unbelievable."
Making up the top ten were Hindustan Unilever, the Indian arm of the FMCG company, Google, the search firm, Natura Cosmeticos, a Brazilian beauty group, Bharat Heavy Electricals, the Indian industrial goods conglomerate, and Monsanto, the agricultural expert.
A study from Jeff Dyer, a professor at the Marriott School of Management, Brigham Young University, and Hal Gregersen, a senior affiliate professor at INSEAD, named 100 major businesses that had an innovation premium, Forbes reported.
Their list was based on the gap between a firm's stock market valuation and the actual cash flows attributable to its product portfolio. A positive difference favouring the first of these figures was thought to indicate investor confidence about innovation-led increases in future earnings.
Salesforce, the social enterprise services group, headed the charts with a stock price that is 75% greater than could be justified purely by its cash flow alone, the analysis found.
Marc Benioff, the CEO of Salesforce – which has logged an average revenue increase of 39.5% in the last five years, when its net income has expanded by 78.7% annually – recently said the firm will aim to replicate the success of Facebook inside companies.
"Facebook is becoming a vision ... of what a consumer operating system is," he said. "When I look at Facebook, it is a tremendous direction for where we are going as an industry."
Amazon, the online retailer, claimed second in the innovation rankings, with a stock market valuation of $92.7bn, 58.7% beyond the figure its cash flow would dictate.
Taking third place was Invasive Surgical, which has pioneered the use of robotically-assisted technology to improve medical procedures. Investors value the organisation at $13.4bn, an "innovation premium" of 57.6%.
Fourth position went to Tencent, the web company, priced at $46.5bn on the stock market, 52.3% higher than its cash flow would allow. The Chinese firm launched an English-language microblog this month, suggesting increasingly international ambitions.
Apple, the electronics firm, is one of the world's largest corporations. Its market capitalisation of around $303bn is equivalent to an innovation premium of 48.2%
"We've had a series of unbelievable products that we believe are the best products in the world, and our customers tell us that, which is more important than us saying it," Tim Cook, Apple's CEO, said last week. "We've got a pipeline that's unbelievable."
Making up the top ten were Hindustan Unilever, the Indian arm of the FMCG company, Google, the search firm, Natura Cosmeticos, a Brazilian beauty group, Bharat Heavy Electricals, the Indian industrial goods conglomerate, and Monsanto, the agricultural expert.
Data sourced from Forbes; additional content by Warc staff
