Total Shareholder Return

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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.


Total Shareholder Return Forum
  Dividends in 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 c...
     
 

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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


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