Visualizing shareholder value of DJIA companies

What is “shareholder value”? It may be the dumbest idea in the world as Steve Denning in Forbes argues. Or, as Wikipedia says, the term may be used “To refer to the concept that the primary goal for a company is to increase the wealth of its shareholders (owners) by paying dividends and/or causing the stock price to increase“.

Maybe it’s both. Here I consider “shareholder value” to be cash in the form of dividends returned to shareholders. Cash is king, as they say.

The first of the two visualizations correlates company’s EPS to their dividend. The chart shows shareholder value in cash, the higher up in Y-axis is more cash to shareholders. X-axis is the EPS and size of the bubble is net income.

The second visualization correlates net profit margin to dividend payout ratio. Y-axis shows how much of the EPS company pays as dividends. X-axis is net profit margin and size of the bubble is dividend amount, bigger bubble means more cash.

The source of the data is Q1/2012 financial data from Google Finance. Charts are generated using Google Charts.

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