Building shareholder value appears to be the new Job One at Ford Motor Co.
Ford CEO Jac Nasser is crusading to educate Ford employees on the importance of shareholder value. He wants to create a more entrepreneurial, cost-conscious and growth-oriented company.
Over the past three years, Ford shareholders have fared better than investors in other major automakers, according to the Automotive News/Pricewaterhouse-Coopers Total Shareholder Return Index. And, in general, automakers have generated more value for their shareholders than auto suppliers or U.S. auto retailers.
STOCK SPLITS, BUYBACKS
Over the past three years, Ford's total shareholder return was 178.7 percent, more than twice the industry average, the survey shows. A $1,000 investment in Ford stock three years ago would have returned about $2,790 at the start of this year.
The Automotive News/PricewaterhouseCoopers Total Shareholder Return Index takes into account the change in a company's share price as well as any stock splits and buybacks. The index assumes all cash dividends are reinvested.
'As the automotive industry enters its second century, shareholder value will become the differentiator between winners and losers,' said Jeff Sands, a director of North American investment banking with Pricewaterhouse-Coopers Securities in Detroit.
In addition to automakers, the study by PricewaterhouseCoopers looked at the 42 global suppliers with capitalization of more than $200 million and whose revenues were at least 50 percent automotive original equipment.
The auto retailers examined were all publicly traded U.S. companies with more than $100 million in market capitalization.
Only Ford, Renault SA, General Motors and Toyota Motor Corp. outperformed the average three-year index return of 64.4 percent. The three-year measure is considered the most reliable indicator of shareholder value creation.
The auto industry lagged the Dow Jones Industrial Average index with 86.9 percent and the Standard & Poor's 500 Composite with 107.7 percent.
Still, the automakers as a whole far surpassed auto suppliers and auto retailers in generating shareholder value, the PricewaterhouseCoopers results show.
Sands said companies such as Ford and Toyota, the top one-year performer, will prosper and help set the rules for the industry. 'Those that lag will fall victim to globalization and consolidation.'