when investors want to look under the hood to see how a company performs for its shareholders they first look at mva a company s mva is an indication of its capacity to increase shareholder value over time a high mva is evidence of effective management and strong operational capabilities a low mva can mean the value of management s actions and investments is less than the value of the capital contributed by shareholders a negative mva means the management s actions and investments have diminished and reversed the value of capital contributed by shareholders 
mva reflects commitment to shareholder valuecompanies with a high mva are attractive to investors not only because of the greater likelihood they will produce positive returns but also because it is a good indication they have strong leadership and sound governance mva can be interpreted as the amount of wealth that management has created for investors over and above their investment in the company companies that are able to sustain or increase mva over time typically attract more investment which continues to enhance mva the mva may actually understate the performance of a company because it does not account for cash payouts such as dividends and stock buybacks made to shareholders mva may not be a reliable indicator of management performance during strong bull markets when stock prices rise in general examples of mvacompanies with high mva can be found across the investment spectrum alphabet inc googl the parent of google is among the most valuable companies in the world with high growth potential its stock returned 1 293 in its first 10 years of operation while much of its mva in the early years can be attributed to market exuberance over its shares the company has managed to more than double it from 2015 to 2019 alphabet s mva has grown from 354 25 billion in 2015 to 606 20 billion in december 2017 to 809 01 billion in december 2019 to 1 19 trillion in 2020 1on the other end of the spectrum is one of the most established companies in the s p 500 index the coca cola company ko coca cola is one of warren buffett s favorite stock holdings because its management is so effective at increasing shareholder value at the end of the year 2019 the company s mva was 219 66 billion up from 158 52 billion in 2017 and 150 41 billion in 2015 and that does not include the roughly 6 billion annually in dividend payments to shareholders 23 as of 2019 coca cola has increased its dividends each year for the last five years by an average of 5 3 per year 4