Total Shareholder Return

Comparing the change in capital value of companies. Explanation of Total Shareholder Return.



  

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What is Total Shareholder Return? Description

Total Shareholder Return (TSR) represents the change in capital value of a listed/quoted company over a period (typically 1 year or longer), plus dividends, expressed as a plus or minus percentage of the opening value.

 

Calculation of Total Shareholder Return. Formula

 

(Share Price at the end of the period - Share Price at the beginning of the period + Dividends) / Share Price at the beginning of the period = Total Shareholder Return.

 

Note: dividends include not only regular dividend payments, but also include any cash payments to shareholders, and also include special or one-time dividends, and also include share buybacks.

 

TSR can be easily compared from company to company, and benchmarked against industry or market returns, without having to worry about a bias regarding size. Because Total Shareholder Return is a percentage.

 

Limitations of Total Shareholder Return

As a result of its nature, TSR can not be calculated at divisional level (Strategic Business Unit) and below. And also as a result of its nature, TSR can not be observed for privately held companies.

 

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Recent User Comments
Bazil - SA Total Shareholder Return "Should in the formula "dividends" be read as "dividends per share at the beginning of the period" or with "dividends per share at the end of the period" to eliminate the ambiguity? Before possibly implementing this suggestion, would someone please clarify this matter for me now?"    0
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Total Shareholder Return Education & Events


 

Compare also: Market Value Added  |  Economic Value Added  |  CFROI  |  EBIT  |  EBITDA  |  Cash Ratio  |  Current Ratio  |  Return on Equity  |  Fair Value  |  P/E Ratio  |  PEG Ratio  |  Economic Margin

 

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Copyright 2009 12manage - The Executive Fast Track. V10.4 - Last updated: 22-11-2009. All names tm by their owners.

  ●  (NL) Dividends in TSR "Neither of the two suggestions you make are right, Bazil. Where it says "Dividends" in the formula, you can read "Dividends per share during the period"."