The world's BEST conglomerates

Conglomerates don't get much love. Few folks have a kindly word for them. They are seen as the overweening Big Brothers of business. If only conglomerates had thought to call themselves business parents.

For that is what the best conglomerates are--families of businesses, sometimes closely related, often only distantly so. At the center is a patriarch, the chief executive, dispensing not familial favors, but capital.

Sometimes the family members are close, though sometimes they're not even on speaking terms. Conglomerates would provide an interesting test of Tolstoy's assertion in Anna Karenina that "all happy families are alike; every unhappy family is unhappy in its own way."

Of the top five conglomerates in our list of high-performing global public companies, two are tight-knit, by the standards of such families. Norsk Hydro, Norway's largest company, is an energy and aluminum company. Honeywell is known for aerospace products and control technologies.

Slideshow:
Top Performing Conglomerates
Top-Performing Global Service Companies
Top Performing Food Companies

By contrast, 3M, the Post-It Notes to ceramic textiles group, and Dover, which makes everything from turbine bearings to circuit board solderers, are widely diversified industrial products and services companies.

ITT Industries holds a special place in conglomerate history. It is the engineering and manufacturing rump of the archetypal conglomerate of the 1960s and '70s, ITT.

Harold Geneen transformed International Telephone & Telegraph from a medium-sized telco into a behemoth with interests ranging from Sheraton Hotels & Resorts to Hartford Life Insurance to Avis car hire. The conglomerate eventually collapsed under its own overambition. ITT Industries, however, is our top-performing conglomerate.

Norsk Hydro, with annual sales of $25.8 billion, is the largest of our five top-performing conglomerates but only ranks as the sixth largest conglomerate in our latest annual rankings of the world's biggest companies. General Electric, Siemens, Tyco International, United Technologies, Royal Philips Electronics and Hutchison Whampoa all rank higher.

Slideshow:
Top-Performing Global Retail Companies
The World's Hottest Jobs
Billionaires and the Global 2000

What sets our five high performers apart? All ten companies mentioned above are world-class conglomerates and members of the Forbes 2000 list of the world's largest public companies. But while it does not hurt to be big if you want to compete in a global economy, size alone is no guarantee of success.

That is why we take a second look at the Forbes 2000, putting its members' financial and management performances under the microscope to find big companies in each industry that are absolutely great at what they do--and have the numbers to prove it.

The result is an elite group. Fewer than 150 of the 2,000 companies cleared our demanding high-performance hurdles. The top five conglomerates also reflect booming commodity markets, including oil and gas, the expansion of the world economy, particularly manufacturing in Asia, and the strength of defense spending in the US. The Space Defense Index, a benchmark for defense, homeland security and space stocks in the US, has risen by an average of 15 per cent per year for the past five years.