The FINANCIAL — The world’s top value creators are often the beneficiaries of key structural advantages or economic tailwinds. But even companies that don’t enjoy such advantages can deliver superior total shareholder return (TSR) relative to their peers, according to a new report by The Boston Consulting Group.
When it comes to value creation, what really matters is both absolute performance and performance when compared with a relevant peer group.
The 2015 Value Creators Rankings
The report includes this year’s rankings, based on an analysis of TSR, of 1,982 global companies for the five-year period from 2010 through 2014. The rankings list the top ten value creators for the entire sample, for all large-cap companies (defined as those with a market valuation of more than $50 billion), and for 27 distinct industrial sectors.
The median average annual TSR for the companies in our sample was 14.6 percent. The median average annual TSR for the 27 industry sectors ranged from a high of 25 percent (in fashion and luxury) to a low of –8 percent (in mining).
The median average annual TSR of the top ten companies in each industry outpaced their industry averages by between 8 percentage points (in insurance) and 28 percentage points (in chemicals and in construction).
A company had to deliver an average annual TSR of at least 23.3 percent to be in the top quartile of the global sample and 69.2 percent to make the global top ten. And this year’s top value creator—for the third year in a row, the U.S. biopharmaceutical company Pharmacyclics—had an average annual TSR of 108 percent.
Biopharma companies dominated this year’s global rankings, taking four of the top ten spots. In addition to Pharmacyclics at number one, the list includes Ireland’s Jazz Pharmaceuticals at number five, Regeneron Pharmaceuticals at number seven, and Israel’s Taro Pharmaceutical Industries at number eight. Biopharma’s dominance is even more pronounced in the large-cap top ten, with companies from the sector capturing five of the spots.
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