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Exploring the family effect

Oct. 01, 1991
Oct. 01, 1991

Table of Contents
Oct. 1, 1991

Cover
MONEY FORECAST
MONEY UPDATE
Departments
COVER STORY

Exploring the family effect

How do family-controlled firms stack up against the market? At the
Pitcairn group's request, Wharton professor Peter Davis identified
and analyzed a broad sample of companies with at least 10% family
ownership over the 20 years to 1990. The resulting index of 165
stocks gained an eye-popping 27-fold, while the S&P 500 rose only
sevenfold. Then Davis culled the list to 32 stocks that best fit the
Pitcairn ideal: high family ownership, superior return on equity, low
debt and little or no dividends in order to preserve capital for
reinvestment. The 32 standouts produced an embarrassment of riches --
up 46- fold over 20 years.

This is an article from the Oct. 1, 1991 issue