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Consilient Observer
October 24, 2023

Total Shareholder Return: Linking The Drivers of Total Returns to Fundamentals

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October 24, 2023

Total Shareholder Return: Linking The Drivers of Total Returns to Fundamentals

Consilient Observer

Total Shareholder Return: Linking The Drivers of Total Returns to Fundamentals

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October 24, 2023

  • We study the sources of total shareholder return (TSR) and tie them to underlying economic principles.
  • The concepts are useful to help assess the prospective returns of a stock and to create a framework for flagging potential value traps, companies with justifiably inexpensive valuations.
  • The analysis reveals that few investors in the stocks of companies that pay dividends earned the TSR and refutes the common belief that dividends contribute to capital accumulation.
  • This framework gives investors a checklist of drivers and the tools to help assess them.
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