The 30-30 Club, an exclusive honor roll for corporations, is named after the baseball milestone of hitting 30 home runs and stealing 30 bases in the same season. To qualify for this corporate version, a company must grow its profits at a 30% rate for five years and achieve a 30% return on stockholders’ equity. This year, only 27 companies made the cut, down from 38 the year before. The selected companies are considered top performers in terms of profitability.
Among the companies that made the 30-30 Club list this year are Cisco Systems, ON Semiconductor, Axcelis, Atkore, and Builders FirstSource. Cisco Systems, based in San Jose, California, has been profitable for 22 consecutive years despite a poor performance in the stock market. ON Semiconductor specializes in computer chips for cars and has seen profits increase by 44% annually over the past five years. Axcelis Technologies makes equipment used in chip production and is also part of the exclusive club.
Atkore, a mid-sized industrial company based in Illinois, manufactures electric conduit, fittings, cables, and structural steel sheets. Builders FirstSource, which supplies materials for single-family homes, is benefiting from pent-up demand in the housing market. While these companies have strong profitability records, some of their stocks may be expensive or carry more debt. The 30-30 Club aims to honor companies that have achieved exceptional financial growth.
Other companies in the 30-30 Club this year include Deere & Co., Chipotle Mexican Grill, Autodesk, Microchip Technology, and First Citizens BancShares. These companies, along with a range of mid-sized companies, have met the criteria for membership based on their profitability and return on equity. Last year’s picks included Merck & Co., Nucor Corp., Encore Wire, Super Micro Computer, and Coterra Energy, with varying levels of stock performance.
The 30-30 Club has been a consistent feature in financial journalist’s recommendations since 1999. Over the years, the picks have generated an average return of 19.1% annually, outperforming the S&P 500 Total Return Index. While past performance does not guarantee future results, the 30-30 Club serves as a recognition of companies that have demonstrated strong financial growth. The selected companies are seen as top performers in their respective industries and deserve to be honored for their achievements.
