They were the best of times, they were the worst of times – for the past two decades, stock prices have surged and plunged, creating and destroying value in a series of bull runs followed by major market crashes. This working paper, “Shareholder Value Creators in the S&P 500: 1991-2010,” explores exactly how much value was created and subsequently destroyed through the S&P 500 between 1991 and 2010. The authors identify companies that were top creators of shareholder value (Apple, Exxon Mobil, IBM) and those that destroyed the most value (American Intl Group, Pfizer, General Electric).
Abstract:
In the period 1991-2010, the S&P 500 destroyed value for the shareholders ($4.5 trillion). In 1991-1999 it created value ($5.1 trillion), but in 2000-2010 it destroyed $9.6 trillion. The market value of the S&P 500 was $2.8 trillion in 1991 and $11.4 trillion in 2010.
We also calculate the created shareholder value of the 500 companies during the 18-year period 1993-2010. The top shareholder value creators in that period have been Apple ($212bn), Exxon Mobil (86), IBM (78), Altria Group (70) and Chevron (67). The top shareholder value destroyers in that period have been American Intl Group ($-217), Pfizer (-188), General Electric (-183), Bank of America (-170), Citigroup (-169) and Time Warner (-130). 41% of the companies included in the S&P 500 in 2004 or 2010 created value in 1993-2010 for their shareholders, while 59% destroyed value. We define created shareholder value and provide the created shareholder value of the 633 companies that were in the S&P 500 in December 2004 or in December 2010. Click to download the paper.