NEW YORK -- Investors who dismiss the government's Malcolm Baldrige National Quality Award as an empty token might want to reconsider.
A new study by the National Institute of Standards and Technology, the Commerce Department unit that manages the Baldrige program, shows stocks in the 11 publicly traded companies that won the award between 1988 and 1993 returned a hypothetical 92 percent, including reinvested dividends.
That's almost three times the 33 percent return investors would have received by investing in the Standard & Poor's 500 Index, the conventional benchmark of market performance.
In dollars and cents, $12,000 invested in Baldrige winners, a little each year, would have grown to $23,016 at the end of the period. An equal amount in the S&P; 500 would have risen to $15,911.
The study "adds to the mounting evidence that, done right, quality management can lead to outstanding returns in many business areas, including financial performance, satisfied customers and improved market share," said Curt Reiman, head of the Baldrige program.
The awards, named after a secretary of commerce under President Ronald Reagan, recognize parent companies or their divisions that focus on high-quality products and services as well.
Investors might have done better if they'd been able to buy stock in all 21 award winners, but 10 of the 21 companies are privately held.
Individual companies' performance ranged from Solectron Corp, up 527 percent, to Westinghouse Electric Corp., down 50 percent. The only other company beside Westinghouse which won the award and saw its stock decline was International Business Machines Corp., which fell 35 percent.