I have pulled ten years of data on the value of publicly-traded companies with a market cap of over $1bn. It has been a laborious process – but it is providing valuable insight into how the level of tangible assets/intangible value varies by industry.
I thought I would share some headline data on the ten year (1999 to 2008) average of tangible book value as a proportion of market value:
- Consumer Staples 8%
- Healthcare 10%
- Telecoms 10%
- Information Technology 19%
- Consumer Discretionary 21%
- Industrials 21%
- Financials 36%
- Energy 36%
- Basic Materials 37%
- Utilities 45%
In aggregate over the 10 year period, tangible assets accounted for only 24% of the market value. This means that three quarters of the market value of the largest publicly-traded companies in the world was due to factors other than the tangible assets on their balance sheets.
Future posts will share some thoughts about what these intangible assets might be – and how their importance might differ by industry category.
