When Apple co-founder Steve Jobs died in October 2011, there was an outpouring of tributes about his genius and creativity. Yet, Steve Jobs was also a unique CEO in that he and the company were so closely intertwined as to almost be inseparable. You couldn't picture one without the other.
His death, then, brought much angst among Apple investors. Could Apple survive without its leader?
And would it still be a good investment?
The Iconic Founders
Steve Jobs was not just a founder of a major corporation, he was an Iconic founder.
The Iconic founders are more than just businessmen with an idea. They end up changing their industries either through a new product or innovations or both.
Their names are usually synonymous with their brands and their legacies live on long after their deaths.
Among the group of Iconic founders are:
1. John D. Rockfeller: founded Standard Oil in 18702. Thomas Edison: co-founded General Electric in 18923. George Eastman: founded Eastman Kodak in 18924. Henry Ford: founded Ford Motor Company in 19035. Walt Disney: founded Disney Studios in 19396. Bill Hewlett and Dave Packard: co-founded HP in 19397. Sam Walton: founded WalMart in 1962
All of the companies these men began still survive, although several of them have had their scares.
Of course, past success is no guarantee of future results. But if shareholders had panicked when Sam Walton died in 1992 and sold the shares, they would have left a lot of money on the table.
In some cases, like General Electric, Exxon and Chevron, these companies have been publicly traded for nearly 100 years or longer. But all of them survived the death of an Iconic founder and then some.
But just how well have these stocks done, say, over the past 2 decades?
1. Hewlett Packard (NYSE: HPQ - News): up 799%2. Chevron ((NYSE: CVX - News): up 586%3. Exxon (NYSE: XOM - News): up 485%4. Walmart (NYSE: WMT - News): up 454%5. Disney (NYSE: DIS - News): up 270%6. GE (NYSE: GE - News): up 260%7. Ford (NYSE: F - News): up 123%8. Eastman Kodak (NYSE: EK - News): down 97%
The Dow was up 294% in the same period. So while several of the companies outperformed, others did not. But ALL of the companies are at least still in the game.
John D. Rockefeller/Standard Oil
John D. Rockefeller created the largest oil empire in the world until it was busted up into 34 companies in an antitrust action by the U.S. government in 1911. But three of the 'new' companies were Standard Oil of New Jersey (now Mobil), Standard Oil of New York (now Exxon) and Standard Oil of California (now Chevron.) Exxon and Mobil merged in 1999. Both Exxon and Chevron are Dow components.
Rockefeller was the richest man in the world at the peak of his power and the Rockefeller name was synonymous with wealth but it hasn't been a bad ride for shareholders either. Both Exxon and Chevron are currently Zacks #3 Rank (hold) stocks.
The performance over the last 20 years:
ExxonMobil: up 485%Chevron: up 586%Dow: up 294%
Thomas Edison/General Electric
Thomas Edison created hundreds of companies but none of them more memorable than General Electric, which was originally a Dow component all the way back in 1896.
Shares soared in the 1990s but hit multi-decade lows during the financial crisis due to losses taken by its GE Capital unit. The stock is now underperforming the Dow Jones Industrial average over the last 20 years. GE is a Zacks #3 Rank (hold).
GE: up 260%Dow: up 294%
George Eastman/Eastman Kodak
Not only did Eastman invent the roll of film, he was also a leader in the concept of branding. He created and trademarked the name 'Kodak' in 1888 and also wrote the copy for the first advertising campaign, 'you press the button, we do the rest.'
Since then, the company has struggled with the advent of digital photography. Eastman Kodak was a member of the Dow Jones for 74 years until it was removed in 2004. It is currently a Zacks #5 Rank (strong sell.)
The company lost 4 cents a share in 2010 and is expected to lose $2.43 in 2011 and $1.29 in 2012. Recently, there were rumors of a possible bankruptcy filing which the company denied.
The last decade has not been kind to Eastman Kodak shareholders.
The performance over the last 20 years:
Eastman Kodak: loss of 96.6%Dow: up 294%
Henry Ford/The Ford Motor Company
Henry Ford did not invent the first gasoline powered automobile but he was the first to bring it to the masses through his incredibly popular Model T. He also revolutionized manufacturing with his assembly line model which increased productivity.
The last decade has also been tough on Ford's shares. Earnings are expected to contract 7% this year, although the company is expected to make $1.82 per share. Earnings are also forecast to fall another 10% in 2012. Ford is a Zacks #4 Rank (sell) stock.
However, during the Great Recession, Ford was the only U.S. car company to NOT take a government bailout.
The performance over the last 20 years:
Ford: up 122.7%Dow: up 294%
Walt Disney/The Disney Company
A lot has changed for The Disney Company since its founder, Walt Disney, died in 1966. Today, it is a worldwide media and entertainment conglomerate. Disney is the company most brought up in comparisons with Apple because its founder was in the creative arts. Walt Disney won 22 Academy Awards, more than any other person.
Disney is still growing its earnings by the double digits, with 20.6% growth expected in 2011 and 15.5% forecast in 2012. It is a Zacks #3 Rank (hold) stock.
The last 20 years has seen the stock underperform the Dow Jones.
Disney: up 270%Dow: up 294%
Bill Hewlett and Dave Packard/Hewlett Packard
Hewlett Packard was famously founded in the garage of 367 Addison Avenue in Palo Alto in 1939. The garage is now considered the birthplace of Silicon Valley. Interestingly, one of the company's first customers was the Walt Disney Studios, which bought 8 oscillators to develop and test a new sound system for the movie Fantasia.
The company is famous for its innovative management style known as the 'HP Way.' Dave Packard died in 1996. Bill Hewlett died in 2001. Both had moved to Board of Directors positions in the 1970s however. The company was in the thick of things during the dot-com boom but has since hit a rough patch with several management changes.
Hewlett Packard is expected to grow its earnings by 5% in 2011 but it is a Zacks #4 Rank (sell).
Still, thanks to the dot-com boom of the 1990s, investors did very well for themselves over the last 20 years.
Hewlett Packard: up 799%Dow: up 294%
Love it or hate it, Walmart revolutionized retail from mom and pop department stores to supercenters and warehouse clubs. Sam Walton used new technologies that allowed the chain to expand.
WalMart was one of the best performing Dow components during the Great Recession. Despite being founded in 1962, the company is still posting double digit earnings growth, with earnings expected to climb 10% in 2011. Walmart is a Zacks #2 Rank (buy) stock.
Over the last 20 years, shares have outperformed.
Walmart: up 454%Dow: up 294%
Lessons From the Iconic Founders and Their Companies
. The biggest lesson for investors is that decades after these companies were founded they were still surviving, with or without their original visionary. That indicates that the foundation that was put in place by the Iconic founder is stronger and more durable than most people realize.
Good future management and luck will likely play a role in Apple's future success, or lack thereof.
But if history is any indication, it will take years, or maybe even decades, for Steve Jobs' legacy to ease at the company he founded.
[The author of this article owns shares of Exxon.]
APPLE INC (AAPL): Free Stock Analysis ReportDISNEY WALT (DIS): Free Stock Analysis ReportEASTMAN KODAK (EK): Free Stock Analysis ReportFORD MOTOR CO (F): Free Stock Analysis ReportGENL ELECTRIC (GE): Free Stock Analysis ReportHEWLETT PACKARD (HPQ): Free Stock Analysis ReportEXXON MOBIL CRP (XOM): Free Stock Analysis ReportCHEVRON CORP (CVX): Free Stock Analysis ReportWAL-MART STORES (WMT): Free Stock Analysis ReportZacks Investment Research
- Walt Disney
- Eastman Kodak
- Bill Hewlett
- General Electric