Page 38 - Taking Stock 22 Summer 2019

Summer 2019 Taking Stock Product Spotlight WHAT ARE EXCEPTIONAL COMPANIES? We de ne exceptional companies as those companies that can persistently and reliably create wealth over the long-term from: — enduring and di cult-to-disrupt competitive advantages — disciplined and value-accretive capital allocation — stable long-term structural pathways to growth What di erentiates exceptional companies is that they bene t from high or improving economic returns and display better than average operating metrics. They are also less reliant on outside capital (or leverage) to generate healthy cash returns on equity, and reinvest for future growth and prosperity. 3 3 8 8