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Value Creation and Competitive Advantage: Empirical Evidence from Dividend Champions of the S&P 500

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  • Marina Damilano
  • Nicola Miglietta
  • Enrico Battisti
  • Fabio Creta

Abstract

The aim of the paper is to verify, through the measurement of value creation, the existence of a competitive advantage in those companies recognized as “Dividend Champions” in the S&P 500. The paper uses a quantitative and explorative method of research and is divided into two sections- in the first, it identifies, within the S&P 500, those companies that have systematically, for more than 40 years, distributed dividends that have grown each year (60 firms), and in the second, it gives a comparative analysis of the Return on Invested Capital and Weighted Average Cost of Capital of the analysed firms, in order to investigate the existence of a competitive advantage. The results of our research show that the “Dividend Champions” have, in comparison to their main competitors of reference in the US market, a lasting competitive advantage, in virtue of a higher profitability with respect to the cost of capital. Specifically, we can observe that the “Dividend Champions”, classified by sector, are also “Value Champions”, able to beat competitors and having a lasting competitive advantage

Suggested Citation

  • Marina Damilano & Nicola Miglietta & Enrico Battisti & Fabio Creta, 2021. "Value Creation and Competitive Advantage: Empirical Evidence from Dividend Champions of the S&P 500," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(12), pages 1-50, July.
    • Handle: RePEc:ibn:ijbmjn:v:13:y:2021:i:12:p:50
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    References listed on IDEAS

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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