Shareholder Value Creators in the S&P 500: Year 2004

Abstract

During 2004, 64% of the companies included in the S&P 500 created value, while in 2003 87% of these companies did it. The market value of the 500 companies was $11.2 trillion in 2004 and $10.1 trillion in 2003. The top shareholder value creators in 2004 were Exxon, General Electric, Ebay, Johnson & Johnson and Qualcomm. We define created shareholder value and provide the ranking of created shareholder value for the 500 companies.

We also calculate the created shareholder value of the 500 companies during the twelve-year period 1993-2004. General Electric was the top shareholder value creator and AT&T was the top shareholder value destroyer during the twelve-year period.

On average, the small market capitalization companies of the S&P were more profitable. The volatility of the S&P fell since 1998 to 2004, but the volatility of his components increased on average.

Keywords: Shareholder value creation, created shareholder value, equity market value, shareholder value added, shareholder return, required return to equity, EVA

JEL Classification: G12, G31, M21