The report singles out 25 European large caps for which management quality creates value over the long term and from which three principal lessons can be drawn:
- Over a ten-year period, the Top 25 European companies –dividends not reinvested– rose by +214% compared with +52% for its benchmark index, the Stoxx 600, and +2% for the Bottom 25.
- Family-owned companies, which represent 18% of the universe examined, stood out favourably, accounting for three of the top ten: L’Oréal, Roche Holding and BMW.
- Within the Top 25, two companies are on a Buy, with upside of over 20% on a 12-month timeframe: Essilor (medical equipment) and Novo Nordisk (pharmaceuticals).
This analysis was conducted by the team led by Jean-Philippe Desmartin, head of the ESG (Environment, Social, Governance) studies, and Nicolas Jacob, joint-head of ESG studies, in close cooperation with the equity-research teams of Oddo Securities in Paris and Oddo Seydler in Frankfurt.
The report develops a model based on four themes (the CEO, the management team, the organisation/middle management and human resources), with the help of 21 quantitative and qualitative criteria. The methodology used was developed in Oddo Securities' inaugural study of this kind published in March 2014, which examined the management quality of 50 French large caps, and was extended in November 2014 to 108 listed French mid caps.
About Oddo & Cie:
Oddo & Cie is an independent financial group and is a Franco-German specialist in the Mittelstand and medium-sized businesses domains The Oddo Group was founded over 160 years ago and currently has over 1,100 employees (including 100 analysts and 130 IT engineers) and € 31bn in assets under management. Oddo & Cie operates in investment banking and capital markets: brokerage on the equity and bond markets, financial analysis, investment banking, private banking, asset management with associated front- and back-office activities. The Group stands out thanks to its ownership structure as 60% of its capital is held by the Oddo family and over 30% by 56% of its employees. This “partnership” ethos guarantees the long-term involvement of its teams. At end-2014, Oddo & Cie reported a net profit of € 54.1m after tax and had shareholders' equity of € 539m. In 2015, the group is currently integrating two recently-acquired companies, Oddo Seydler and Oddo Meriten Investment Management (conditional upon approval from BaFin, the German financial supervisory authority). Germany now accounts for over 25% of Oddo & Cie's staff and revenues. The group is becoming a Franco-German business.
About ODDO SEYDLER BANK AG – Your partner for the SME sector
ODDO SEYDLER BANK is active in securities trading and in the capital market business mainly in three sectors: in equity and bond trading, as a designated sponsor in market making and as a specialist in floor trading on the Frankfurt Stock Exchange. The company advises German small and medium-sized companies in all capital-related projects, particularly in the fields of investment banking, asset management, financial analysis, the structuring of corporate bonds, promissory notes, convertibles, initial public offerings (IPOs) and capital increases.
ODDO SEYDLER BANK AG is a fully owned subsidiary of the French brokerage house for mid-cap stocks Oddo & Cie, Paris. Oddo & Cie was founded in 1849 and currently employs a staff of over 1,100 in the areas of investment banking, asset management, brokerage on the equity and bond markets, financial analysis and private banking with branches in Europe, the USA and Asia. The company has assets under management amounting to more than 30 billion euros. In terms of its ownership structure, the Oddo family holds 60 percent of the Oddo & Cie capital and the employees over 30 percent. The shareholder equity totals almost 500 million euros.
The team of analysts at the Oddo Group, which comprises 70 specialists for equities and bonds, are currently observing around 400 stock corporations, including 180 French, 120 German and 100 other European companies. Oddo Securities occupied first place in the field of midcaps in the latest Extel Survey and is ranked second in France in the field of stock analysis.