Stock return

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The total shareholder return ( English total shareholder return , TSR ) is a return to evaluate the investment performance ( performance ) of shares .

While the dividend yield describes the ratio of the dividend to the current price, the stock yield is a measure of how the value of an equity investment has developed over a period of time and takes into account both the dividends incurred during the period and any price increases that may have occurred.

By definition, the dividend yield on a stock cannot be negative. Since the return on shares also shows price losses, the return on shares can also be negative. On average, however, the longer an equity exposure, the lower the probability of a negative equity return.

calculation

The stock return for a given period is calculated as

Example DAX

The Berlin finance professor Richard Stehle used the example of the shares of the DAX to examine the dividend yield in the period from 1948 to 2005. For this investment period of 57 years, he examined the average annual return an equity investment would have generated if the shares that were included in the DAX had been bought on December 31 of a given year (purchase year) and those on December 31 of another year (year of sales) would have sold again assumed that in accordance with the definition of the stock return the dividends paid plus the refunded corporate income will be reinvested in shares of the distributing company (see this. imputation system , half-income method ; from 2009: withholding tax , partial income method ). He does not take into account any income tax that may be incurred (as it differs individually). He has presented the result of his investigations in a yield triangle.

For the period under review (1948–2005) there are 1512 possible investment periods. There were negative average annual stock returns for 84 of these potential investment periods. After an investment period of 10 years, there was a negative stock return in only 7 cases, the minimum return was −2 percent, and for investment periods of 15 years there was an average annual stock return of over 0.5% in all cases (minimum at 31 . Invest December 1960 and sell December 31, 1976).

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