Nvidia and Apple: The business world is constantly evolving, and despite fears of a recession, 2023 was a good year for the capital market globally, which recorded an average annual return of around 12% from 2019 to 2023, up from 7% in the previous five-year period. The jump was mainly driven by technology and related companies, thanks to implementing innovative tools such as generative artificial intelligence. These are the initial findings of the Boston Consulting Group’s (BCG) Value Creators 2024 study, now in its 26th edition. The report annually analyses the total shareholder return (TSR) of nearly 2,500 companies worldwide across 35 sectors from 2019 to 2023 to rank companies and sectors with strong and sustainable performance.
“The extraordinary success of the technology sector reflects the acceleration and adoption of emerging technologies such as GenAI, highlighting a trend that goes beyond a simple post-recession recovery and brings about a radical transformation in the very foundation of our industrial and commercial fabric.” Commented Fabrizio Pessina, Managing Director and Senior Partner at BCG. “Looking to the future, companies will have to focus precisely on their ability to innovate, as well as on cost efficiency, in order to maintain investor confidence and sustain their TSR growth in a market that shows increasingly high expectations.”
Tech-driven
Technology-based companies, particularly hardware manufacturers, have stood out in the current landscape, with a median TSR of 27% per annum from 2019 to 2023. Other digital giants such as NVIDIA and Apple, the latter with a market capitalization of up to USD 3 trillion at the end of 2023, software manufacturers such as ServiceNow and Shopify, electric car giants such as Tesla and BYD, and e-commerce giants such as PDD and Mercado Libre also featured prominently.
Looking at specific geographies, the ranking is dominated by Asia-Pacific companies, which hold 51 positions among the top 100 Value Creators worldwide and cover the top 10 positions in the various sectors analyzed in 39% of the cases. The large number of leading companies in technology and other highly ranked sectors and more favourable macroeconomic conditions have also allowed North American companies to expand their representation in the rankings. Indeed, these companies occupy 38 positions in the top 100 Value Creators, up from 27 in 2023. Moreover, they have a strong presence in the top ten sectors analyzed (they hold 41% of the top positions versus 38% in 2023). European companies, on the other hand, remain underrepresented. Despite being worth 20% of the overall sample, they are only present in 9 places among the top 100 Value Creators and have a small presence in the top 10 sectors (13%).
A revival of traditional
In the industry-specific top ten, there are also some Italian excellences: Ferrari is among the top ten Value Creators globally in the automotive sector, Brunello Cucinelli is among the top ten in the fashion & luxury sector, UniCredit is among the top ten in banking, INWIT in the top ten in telco. No less interesting, however, is the revival of some traditional and asset-heavy industries, such as mining and construction materials, which have shown a strong recovery, especially in the US market, managing to avoid recession despite high interest rates. These sectors have seen a resurgence in investor support, with companies moving from stagnant TSR performance to significantly better results, now ranking among the top performers by sector, notably mining (2nd among 35 sectors), construction materials (3rd), machinery (4th) and materials (6th), and multi-business conglomerates (8th).
Finally, while some sectors saw their returns grow, others experienced a slight slowdown in TSR, one example being the healthcare sector, although median returns continued to exceed 10% per annum. While some companies in the healthcare sector experienced a surge in earnings during the pandemic, today, with a more stable healthcare landscape, investors seem to be recalibrating their expectations. As a result, among the 35 sectors analyzed, high-capitalization pharmaceutical companies are now ranked 18th from the 2nd place they held last year, medtechs 24th (up from 7th in 2023) and healthcare services 25th (up from 6th).
