Best employers, great returns

NEW YORK (CNNMoney.com) -- Not only do employees have it pretty good at Fortune's Best Companies to Work For, apparently so do the shareholders.

As a group, public companies on Fortune's 2007 list of 100 Best Companies to Work For significantly outperformed the S&P 500 over the long term, according to a study by Deloitte Consulting.

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Indeed, the Best Companies to Work For returned a total of 18.1 percent to shareholders over the last three years, while the S&P notched only 10.5 percent. Among the Best Companies, No. 22-ranked Valero Energy (Charts) was the biggest gainer by far, with a whopping three-year return of 65.8 percent.

"Intuitively, if a company is one of the Best Places to Work and they are making legitimate, smart investments in their people, then it makes sense that they are making other smart investments," said Bob Dalton, a principal at Deloitte Consulting.

And "it turns out that the Best Companies were performing better," he added.

Indeed, over the last five years, Best Companies to Work For returned 15.7 percent on average, while the S&P saw only a 6.2 percent return. In that time, Station Casinos (Charts), ranked 18 on Fortune's list, delivered the biggest return, near 50 percent.

The performance difference is most impressive over the last decade, when Best Companies to Work For returned an average 18.9 percent to shareholders, far outperforming the S&P's 8.4 percent total return. Leading the pack, Internet media company Yahoo! (Charts) returned 43.2 percent over that period. Yahoo! is no. 44 on the Best Companies list.

Over the short term, though, the Best Companies to Work For didn't quite keep up. The S&P 500 saw a one-year return of 15.8 percent, just beating the 15 percent returned by the Best Companies to Work For.

In fact, more than one-third of the public companies on the list had negative returns last year. Whole Foods (Charts), ranked no. 5, was down 34 percent in 2006. On the other hand, real-estate investment firm Jones Lang LaSalle (Charts), no. 66 among best employers, delivered a stellar 101-percent return last year.

Why didn't the Best Companies to Work For beat the market last year? 2006 was a remarkably good year for the S&P, making the short-term results more of "an anomaly," said Dalton.

Besides, he adds, "it's more appropriate to use a longer term comparison to shake out short-term volatility in the market."

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