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The Rise of the Cash Machine

February 22, 2012 by Jeffrey Kotzen, Frank Plaschke, Hady Farag, and Eric Olsen
In This Article
  • In 2011, global equity markets declined for the first time since the financial crisis year of 2008.

  • The big exceptions were the U.S. market and the stock markets of a small number of newly emerging economies.

  • Nine out of the top ten large-cap single-year value creators were located in the U.S.  





This is the first in a series of online articles published as part of The Boston Consulting Group’s 2012 Value Creators Report. The full report will be published in September.

In 2011, global equity markets reversed direction, declining in value for the first time since the crisis year of 2008. The MSCI All Country World Investable Market Index of total shareholder return (TSR) was down by approximately 6 percent last year, reflecting investor concerns about the sovereign-debt crisis in Europe and the sustainability of a global economic recovery.

2012 Value Creators

Of course, some companies, local markets, and industry sectors did far better—or far worse—than the average. Who were the winners and losers in 2011? Which companies, countries, and industries have continued to create value in the face of significant economic headwinds? And what, if anything, do the results tell us about the dynamics of value creation in today’s economy?

To answer these questions, The Boston Consulting Group recently analyzed the 2011 TSR of more than 5,000 companies across 40 countries and 37 industry sectors. There were three key findings:

  • Broad declines in TSR meant that there were far fewer safe havens for investors. The equity markets of only 6 countries out of the 40 covered by the MSCI index delivered positive TSR in 2011. And only a quarter of the 37 industry sectors did so.

  • Although the average returns were negative, the top single-year value creators in 2011 still managed to deliver attractive shareholder returns. The top-ten companies in our sample of 112 large-cap companies (those companies with year-end market valuations greater than €40 billion, or about $52 billion, generated TSRs from 26 to 45 percent.

  • Dividends and other direct distributions to shareholders are on the rise, and they may have played an outsized role in the performance of many of the top companies and leading industry sectors.