Strong capital markets in 2023 boosted shareholder return across companies: Report

In 2023, the average annual total shareholder return (TRS) saw a significant increase across companies due to strong capital markets, as reported by the Boston Consulting Group’s Value Creators database. The median TRS rose to 12 percent per year from 2019 to 2023, up from 7 percent per year from 2018 to 2022.

Technology and tech-related companies led the way, driven by excitement over generative AI which helped them rebound from losses in 2022. Mega-cap companies and semiconductor manufacturers stood out in value creation. Software and electrical components industries also maintained a strong TRS trajectory, ranking 5th and 9th among the 35 industries.

Tech hardware companies secured top positions, with NVIDIA and Apple leading the pack, the latter boasting a $3 trillion market cap by the end of 2023. Other notable names included ServiceNow, Shopify, Tesla, BYD, PDD, and Mercado Libre.

The 2024 rankings highlighted industries that achieved substantial TSR gains above the market average of 5 percent. The first group includes traditional industrial sectors like mining, building materials, machinery, metals, conglomerates, and construction. Building materials and construction particularly excelled in the US market, avoiding a recession despite high interest rates.

The second group comprised industries that faced TSR headwinds from 2018 to 2022 but saw strong recoveries in 2023, including automotive, consumer durables, and travel and tourism sectors.

Some healthcare sectors experienced a slowdown despite annual returns surpassing 10 percent, as investors recalibrated their expectations in a more stable healthcare landscape.

Geographically, North American companies expanded their representation in the global value creators rankings, while Asia-Pacific companies also claimed a significant share. European companies, however, remained underrepresented among the top performers.

Looking ahead, companies are urged to invest in innovation, such as artificial intelligence and sustainability, to drive value creation and maintain investor confidence and TSR momentum.

The BCG 2024 rankings analyzed the TSR of 2,355 companies worldwide from 2019 to 2023, excluding companies based in Russia, Argentina, and Turkey due to skewed valuations.