Does Innovation Pay?

To answer that, I look at three companies:  Apple, HP, and Dell.  Apple is rated the most innovative company in the world by both BusinessWeek and FastCompany; HP is #42 in the BW poll and doesn't make the FastCompany 50; Dell makes neither list.

Let's look at five year stock price:

• Apple went from $63.55 to $346.66
• HP went from $32.13 to $40.81
• Dell went from $25.96 to $16.01

Let's look at the most recently reported full year revenue:

• Apple:  $87.5B
• HP:  $127.2B
• Dell:  $61.5B

Profit margin:

• Apple's is 22.36%
• HP's is 7.17%
• Dell's is 4.29%

And finally, guess which companies match these market capitalizations:

• $320.6B
• $88.3B
• $30B

Yep, Apple, HP, and Dell in that order.

Seems to me the answer to the title is pretty clear -- innovation pays big.