The flip side to shareholder-friendly stocks expected to underperform the market? Highfliers that pay little heed to their owners' interests. And then there are top-flight companies that also treat their shareholders with respect.

Institutional Shareholder Services -- the big name in corporate proxies -- measures how well a company performs in as many as 63 categories, covering four broad areas. Moreover, each company is scored relative to its market index and its industry group. It assigns the stocks a rating that it calls Corporate Governance Quotient, or CGQ.

Some evidence supports the notion that companies with weaker governance have higher risk, decreased profitability, and lower valuations. We'll be looking at stocks that Motley Fool CAPS investors have marked to outperform the market and that also sport above-average CGQ scores, either in their index group or among industry peers.


CAPS Rating (5 Max)

Index CGQ Ranking^

Industry CGQ Ranking^





Huntsman (NYSE:HUN)




InterDigital (NASDAQ:IDCC)




Oshkosk (NYSE:OSK)




Terex (NYSE:TEX)




Sources: Yahoo! Finance, Motley Fool CAPS.
^ Relative placement when compared with companies in index or industry. Higher is better.

Although finding good companies and holding them for the long term is one of the greatest secrets to investing, there are many factors that an investor should consider, and how well a company treats shareholders shouldn't be least among them. View these rankings as a way to gauge how these businesses stack up against one another relative to their shareholder policies.

Go to the head of the class
Somali pirates have been wreaking havoc on oil supertankers off the country's coast, hijacking them and demanding princely ransoms. Although we may picture tri-cornered hats, parrots, and sabers when we think of pirates, these criminals carry significantly greater firepower and seek ransoms far beyond what Blackbeard might have scored.

Helping Saudi Aramco find its seized ship Sirius Star seemed like the thing to do for GeoEye, a satellite imaging company that provides images of the world, primarily to Google (NASDAQ:GOOG) and the government. It turned its eye-in-the-sky toward the ship's last-known location and was able to find it and its 2 million gallons of crude oil.

CAPS member Wraithlok thinks the satellite specialist has its eye on the future, and with the top technology and long-term contracts in place, it should be a winner:

1. They have a lock on the best satellite tech currently available because of export restrictions regarding imagry tech that prevents them from exporting it. That means less competiton

2. They have global reach;


5. They just signed a LONG term contract with Google Earth for Geoy 1 imaging, and they are looking at signing another LONG term contract with the US government as a subcontractor for all of their imaging needs.

Ringing up profits
We may think of Nokia or Research In Motion (NASDAQ:RIMM) when it comes to cell phones, but underneath the cover of those sleek handsets is a valuable patent from InterDigital that will only become more lucrative as time goes on. The 3G mobile telecom technology will dominate the landscape for at least a few years after its win in court over Samsung, and CAPS member bustedbox2 thinks analysts aren't on the ball about this:

The analyst community is significantly underestimating the 2009 earnings of the company. The 2G portion of the settlement with Samsung alone is worth $3.40 of revenue per share. The 3G is the biggest driver of earnings from Apple, [Research In Motion], [LG Electronics], and now Samsung. Yet the consensus for 2009 earnings is only 74 cents for the year. $3.00 to $4.00 would be more accurate.

A Foolish quotient
Many factors go into whether a stock is a buy or sell, but do corporate governance policies enter into your equation? It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page.

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Google and GeoEye are Motley Fool Rule Breakers recommendations. InterDigital and Apple are Stock Advisor picks. Nokia is an Inside Value recommendation. The Fool owns shares of Terex.

Fool contributor Rich Duprey has no financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool's disclosure policy swims with the grace of a mermaid.