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Sigma-Aldrich
The world over, scientists are racing to come up with the next compound to prevent, diagnose, or treat diseases, often by synthesizing drugs from snippets of genes. It’s safe to say that many of these researchers wouldn’t be where they are today without Sigma-Aldrich. The St. Louis company sells 100,000 research chemicals and 30,000 pieces of lab equipment to 1.5 million customers in 165 countries. Many chemicals are bulk commodities today, of course. But by catering to labs of any size—most of its orders average just $400—Sigma-Aldrich can charge premium prices. Its gross profit margins consistently top 50%. One way CEO Jai Nagarkatti has enabled the $1.8 billion company to offer so many products is by acquiring small chemical outfits; he bought four in 2006 alone. Sigma-Aldrich itself was formed in a 1975 merger. Initial investors are happy: On a split-adjusted basis, its shares were worth 50¢ apiece in its 1975 IPO and fetch around 40 today.
| Overall Grade | A- |
|
| Market Data | SIAL | |
| Market Value (2/28/2007) |
$5.4 Billion |
|
| Profitability* | 24.4% | B+ |
| Sales Growth Rate** | 12.1% | B- |
| 12-Month Sales | $1.8 Billion |
|
| 12-Month Net Income | $0.3 Billion |
|
| Total Return | Past 12 Months28.8% | Past 36 Months48.6% |
| Economic Sector | Materials | |
| Industry | Specialty Chemicals | |
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
