Top 20 Most Admired Companies
To create the top 20, Fortune and its survey partners at Hay Group asked the experts -- in this case, more than 3,700 people from dozens of industries -- to select the 10 companies they admire most. This year's winners all have strong records of innovation, leadership, and financial strength -- and their employees know it.
Top 20 rank: 1
Rank in Computers: 1
It is a tribute to its CEO that Apple, which ten years ago seemed headed for the slag heap, is No. 1 on this list. Steve Jobs has always had a knack for weaving magic out of silicon and software. But who knew he could build a $24 billion (in sales) company on the strength of a portable jukebox and a computer with a single-digit market share? His pitch, as he leveraged the success of the iPod, was very simple: Apple products work, and if you buy more than one, they work better. The company (if not its stock) is on a tear, but even with the economy weakening, it will be interesting to see how economically sensitive this growth engine is. - Philip Elmer-DeWitt
Top 20 rank: 2
Rank in Insurance: Property and Casualty: 1
To see "admiration" in action, just look at Berkshire Hathaway's stock chart from last fall. As other financial shares were getting hammered -- some Berkshire investments among them -- investors bid up Berkshire's own stock by 27%. Why? Wall Street believes that Berkshire and its acclaimed leader, Warren Buffett, possess a matchless ability to turn today's problems into tomorrow's profits. The key to this ability: "An absence of any regard for short-term results," says Don Graham, CEO of the Washington Post Co. (of which Berkshire owns 18%). Indeed, Berkshire has just launched a bond insurance company to compete with troubled MBIA and Ambac. It has also invested $800 million in subprime-battered Swiss Re. Can Buffett, 77, continue making lemonade from lemons? There's no reason to think otherwise. Of greater concern: Who takes over once the legend is gone? -- Jon Birger
Top 20 rank: 3
Rank in Electronics: 1
GE is no longer No. 1, but its reputation has still held up well, considering. The company gets half its profit from financial services but announced it was bailing out of subprime in July, before the worst trouble hit. The resulting write-offs didn't dent earnings significantly. While its stock is stuck where it was six years ago, GE remains America's top shareholder-wealth creator, and it continues to deliver profit growth of 15% or more, remarkable for a $173 billion company. -- Geoff Colvin
Top 20 rank: 4
Rank in Internet Services and Retailing: 2
Microsoft may be bigger, but everything in the tech world revolves around Google. Its "Do no evil" motto has become a kind of Hippocratic oath for other Silicon Valley firms, and even its fiercest critics agree that Google sees itself as the caretaker for the web. Competitors talk of meetings where Googlers, as altruistic as Santa's elves, ask, "What's good for the web?" Of course, what's good for the web has also proven to be very good for Google. -- Josh Quittner
5. Toyota Motor
Top 20 rank: 5
Rank in Motor Vehicles: 2
In the past 12 months Toyota has seen three top American executives defect to competitors, been humiliated in its first season of NASCAR racing, and had its reputation for impeccable quality sullied. Yet those were mere speed bumps as it cruised to second place in U.S. car and truck sales (passing Ford) and took the winner's circle in worldwide sales. Toyota continues to add capacity, invest in hybrid technology, and roll up the healthiest profits in the industry. If 2007 was a tough year for Toyota, imagine what a good one looks like. -- Alex Taylor III
Top 20 rank: 6
Rank in Food Services: 2
After years of dizzying growth, there's trouble brewing at Starbucks, which dropped four places on this year's list due to weak sales, overexpansion, and intense competition. Its once-soaring stock trades for about half what it fetched a year ago, and in January chairman Howard Schultz returned as CEO. But Starbucks remains a sought-after employer, and its brand, while bruised, is still powerful. -- Matthew Boyle
Top 20 rank: 7
Rank in Delivery and Logistics: 2
With fuel costs rising, it may be FedEx's environmental efforts that matter most these days. Aside from hybrid vehicles, which are becoming key across the industry, the company has also focused on solar energy; a new installation at its Oakland hub generated 80% of the facility's energy demand.
It's that kind of innovation, says CEO Fred Smith, that has made "FedEx" a household verb. And it shows no signs of exiting the lexicon anytime soon. The $35.2 billion company experienced its busiest day ever in December, handling 11.4 million packages. -- Nadira A. Hira
8. Procter & Gamble
Top 20 rank: 8
Rank in Soaps and Cosmetics: 1
As a Navy veteran, A.G. Lafley knows that turning around an aircraft carrier can't be done on a dime. Neither can turning around a mature conglomerate. That is the task Lafley assumed in 2000, after the company had suffered two profit warnings.
But like a ship, once the change in direction is made, a company can gain a certain momentum. And that has been the case with P&G, whose adjusted stock price has more than doubled on Lafley's watch. The key to P&G's success: strategic focus, innovation, and internationalization. Lafley's next challenge: to make sure he has trained his officers to take command. -- Cait Murphy
9. Johnson & Johnson
Top 20 rank: 9
Rank in Pharmaceuticals: 2
From the common cold to clogged arteries, J&J has the remedy. The $61 billion company recorded operating margins of almost 25% last year. More broadly, the 122-year-old health-care conglomerate is admired for its ability to be competitive in three businesses -- consumer health products, branded pharmaceuticals, and medical devices.
That's nothing to sniff at. J&J's competitors have responded to uncertainty in health-care markets by narrowing their focus. -- John Simons
10. Goldman Sachs Group
Top 20 rank: 10
Rank in Securities: 1
At a time when much of Wall Street is begging for capital infusions, it's not a shock that Goldman Sachs, which posted record profits in 2007, earned a spot on this list.
But it's not just about the money. Goldman's peers admire it because the profits are more than a matter of luck (though there's some of that too). Its results are a testament to its culture, an impossible-to-replicate mix of extreme aggression, deep paranoia, individual ambition, and robot-like teamwork.
Even as Goldman has morphed from a U.S. banking partnership into a global colossus, the firm's culture has kept it as nimble as a startup. And that's helped it balance its greed with a hyper-awareness of risk. Sound too simple? Just ask Goldman's rivals. -- Bethany McLean
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