Stock Screens May 2, 2008, 12:01AM EST

Stocks: 11 Innovation Plays

S&P looks for stocks in BW's Most Innovative Companies list that carry its highest investment rankings. Among them: Apple, GE, and Toyota

by Beth Piskora From Standard & Poor's Equity Research

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Which is the most innovative company in the world? According to BusinessWeek, the answer is Apple. The Cupertino (Calif.) technology giant topped BusinessWeek's list of the 25 most innovative companies, published in its Apr. 28 issue.

BusinessWeek arrived at its 2008 list through an electronic survey, conducted by Boston Consulting Group, of executives in the 2,500 largest global corporations by market value. BW also added three financial measures. For 2008, votes cast in the BusinessWeek-BCG survey got an 80% weighting, while three-year revenue and margin growth each got 5% and stock returns were weighted 10%.

S&P went over the list of the top 25 companies to find the ones that had high scores under one of its own key measures: S&P STARS (STock Appreciation Ranking System). We looked for outfits that carried rankings of 4 STARS (buy) or 5 STARS (strong buy), suggesting S&P equity analysts expect them to outperform the S&P 500 index over the next 12 months on a total return basis and rise in price on an absolute basis. (S&P and BusinessWeek are both units of The McGraw-Hill Companies (MHP).)

Eleven names emerged:

Company	Ticker	S&P STARS Rank
Apple	AAPL	4
Boeing	BA	4
Disney	DIS	5
General Electric	GE	4
Goldman Sachs	GS	4
Hewlett-Packard	HPQ	4
International Business Machines	IBM	5
Microsoft	MSFT	5
Nokia	NOK	4
Procter & Gamble	PG	5
Toyota Motor	TM	4

Piskora is managing editor of U.S. Editorial Operations for Standard & Poor's .

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