The World's Most Respected Companies

This article is compiled from a report published in online.barrons.com

A latest survey, conducted in late May and early June with the help of Beta Research in Syosset, N.Y., elicited responses from 116 investors across the country, ranging from proprietors of small advisory firms to the chief investment officers of money-management giants overseeing billions of dollars.

Participants were asked to select one of four statements reflecting their view of each company: Highly Respect, Respect, Respect Somewhat, or Don't Respect. A point value was assigned to each response, with the highest accorded to Highly Respect, and a mean score was tabulated for each company. In the case of ties, the higher ranking went to the company with the most Highly Respect votes. The managers also were asked to rank the factors they consider most important in determining respect for corporations, and were invited to contribute comments on individual companies.

Apple's knockout results to date are even more remarkable, given that the main perceived risk to its run of innovation and sales leadership was realized last year with the death of founder and lead visionary Steve Jobs, who was succeeded as CEO by Tim Cook.

A LONG WINNING STREAK in new-product launches and the deep admiration of investors are no protection against a fall from grace in future years, as this year's stinging decline in the rankings of once-beloved corporate pacesetters makes clear.

Operational missteps, accusations of ethical breaches, and unpopular political stances by leading executives variously weighed on the scores of JPMorgan Chase (JPM), Wal-Mart Stores (WMT), Pepsico (PEP), and Warren Buffett's Berkshire Hathaway(BRK/A), with Berkshire's drop to No. 15 from last year's No. 3 perhaps most poignant, given Buffett's once-unshakable place in the hearts of professional stock pickers.

JPMorgan tumbled to No. 49 this year from No. 14 in 2011, when it was the highest-ranked bank. The company's standing probably suffered at least in part because our survey was e-mailed to participants just before the bank disclosed a $2 billion-plus trading loss, which raised questions about its risk management and landed its formerly bulletproof CEO, Jamie Dimon, in the congressional hot seat.

Despite solid sales performance that helped its shares jump 25% in the past year, Wal-Mart sank to No. 51 from No. 18, a reaction, in part, to allegations that company executives might have bribed Mexican officials to ease store-expansion plans south of the border. Wal-Mart de Mexico (WALMEXV.Mexico), Wal-Mart's publicly traded affiliate, made its debut on our list at No. 90.

Investors' patience with Pepsico, which slid to No. 30 from No. 9, is running low, as the snack and soda maker has seen profit growth slow under CEO Indra Nooyi. Moreover, the company has resisted ever-louder calls by the Street to split its beverage and snack divisions into separate companies, much as Kraft Foods (KFT) and Sara Lee (SLE) did.

THEN THERE'S BERKSHIRE, a perennial top-five finisher since it was first included in 2006, one year after Barron's launched the World's Most Respected Companies ranking. Buffett's conglomerate was always viewed as a model of opportunistic deal-making with a long-term focus, led by the richest man ever to build a vast fortune on buying stocks and whole companies.

International Business Machines (IBM) clocked in at No. 2 this year, withMcDonald's (MCD) at No. 3, Coca-Cola (KO) at No. 8, and Walt Disney (DIS) ranked No. 11.

Yet another Berkshire investment, American Express (AXP), returned to our survey after its exclusion in 2011 for falling short of the market-value minimum. It was this year's most respected financial company, at No. 14. Wells Fargo (WFC), also a Buffett favorite, climbed to No. 27 from No. 42, replacing JPMorgan as the top-scoring bank.