CHICAGO, Jan. 26, 2016 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today named John Stumpf of Wells Fargo & Co. (NYSE: WFC) the recipient of its 2015 CEO of the Year award. Each year Morningstar recognizes a chief executive who exhibits commendable corporate stewardship, demonstrates independent thinking, creates lasting value for shareholders, and puts his or her stamp on an industry.
Wells Fargo is a diversified financial services company headquartered in San Francisco. It provides retail, corporate, and commercial banking services through multiple distribution channels, including online, mobile, and banking locations, to individuals, businesses, and institutions.
The two other nominees for Morningstar's 2015 CEO of the Year award were Jeff Bezos of Amazon.com and Jeffrey Immelt of General Electric Co.
"Our three nominees each lead companies our analysts consider to have a 'Wide' Economic Moat, or structural competitive advantages that position them to earn above-average returns on capital over a long period of time," Michael Holt, global head of equity research for Morningstar, said. "With technological advances, an increasingly global marketplace, and the relentless nature of competition, the stewardship of a moat is not a simple task. We believe assessing the quality of management is a critical step in analyzing any company.
"We named John Stumpf our 2015 CEO of the Year because we think he deserves credit for much of the success Wells Fargo has enjoyed in recent years. He guided the bank through a difficult period in the industry and shunned activities that put profits ahead of customers, building up strength while many of its peers languished. We view Wells Fargo's dominant market position as its largest structural advantage, and its exceptionally high profitability gives us confidence in the bank's potential to generate excess returns for some time."
Stumpf, a 34-year veteran of Wells Fargo, has continued a tradition of consistent strategy and management, helping the company prosper since taking over the helm in mid-2007:
- Wells Fargo's stock has gained more than 70 percent in value over the past decade, outperforming the S&P Financials Index by 100 percent and most of its large U.S. peers. Book value per share has roughly tripled over the same period.
- Returning capital to shareholders is a priority at Wells Fargo—management targets returning between 55 and 75 percent of earnings through dividends and repurchases. In 2015, the company achieved returns on equity well in excess of Morningstar's estimate of the cost of equity and returned approximately 58 percent of profits to shareholders.
- Shareholders have benefited from the firm's conservative balance sheet management and bold mergers and acquisitions. Recent capital-allocation decisions, including the acquisition of large loan portfolios from GE Capital, have continued to demonstrate the company's disciplined approach to growth.
Morningstar's Economic Moat™ Rating is a proprietary measure of a company's sustainable competitive advantages, and Morningstar assigns each company it covers a rating of Wide, Narrow, or None. A company can derive an economic moat through five primary sources: Efficient Scale, a limited market where there is little incentive for new entrants; Network Effect, a situation where incremental customers add value for existing customers; Cost Advantage, allowing a company a greater profit margin and/or the ability to steal market share; Intangible Assets, e.g. patents or strong brands; and Switching Costs, making it costly in time and/or money for customers to switch providers.
For Morningstar's commentary about Stumpf, visit http://www.morningstar.com/goto/ceo2015. Morningstar introduced its CEO of the Year award in January 2000. Winners are chosen by senior members of Morningstar's equity analyst team based on their in-depth independent research. For more information about the Morningstar Awards, visit http://awards.morningstar.com.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 17 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $170 billion in assets under advisement and management as of Sept. 30, 2015. The company has operations in 27 countries.
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