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Total Shareholder Return |
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Comparing the change in capital value of companies. Explanation of Total Shareholder Return. |
What is Total Shareholder Return? DescriptionTotal 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 ReturnAs 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.
Total Shareholder Return ForumTotal Shareholder Return Special Interest Group
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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
Return to Management Hub: Finance & Investing
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