Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
MVA
Old Dominion Freight Line Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
Analysis of the market value added (MVA) from 2018 to 2022 reveals a period of substantial and consistent value creation. The MVA exhibits a strong upward trajectory, indicating that the market valuation of the company has expanded at a rate significantly higher than the growth of its invested capital.
- Market Value Growth
- The fair market value experienced an aggressive increase, rising from 12,337,535 thousand USD in 2018 to 37,771,484 thousand USD by the end of 2022. This consistent year-over-year growth reflects a strong increase in investor confidence and a rising market capitalization.
- Invested Capital Trends
- Invested capital grew at a moderate and controlled pace, moving from 3,056,198 thousand USD in 2018 to 4,117,551 thousand USD in 2022. The stability of this figure, including a slight contraction in 2020, suggests that the increase in market value was not driven by a proportional increase in capital expenditure or debt, but rather by enhanced operational efficiency and profitability.
- Market Value Added (MVA) Expansion
- The MVA increased from 9,281,337 thousand USD in 2018 to 33,653,933 thousand USD in 2022. This expansion demonstrates that the entity created significant wealth for its shareholders over the five-year period. The widening gap between market value and invested capital indicates that the market is assigning a high premium to the company's future earnings potential and management's ability to generate returns well above the cost of capital.
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MVA Spread Ratio
Old Dominion Freight Line Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 33,653,933) | 28,518,193) | 21,869,614) | 13,098,755) | 9,281,337) | |
| Invested capital2 | 4,117,551) | 3,881,401) | 3,423,416) | 3,453,801) | 3,056,198) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 817.33% | 734.74% | 638.82% | 379.26% | 303.69% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| FedEx Corp. | 39.69% | 83.76% | — | — | — | |
| Uber Technologies Inc. | 372.72% | 331.50% | — | — | — | |
| Union Pacific Corp. | 160.12% | 224.50% | — | — | — | |
| United Airlines Holdings Inc. | 2.17% | 9.50% | — | — | — | |
| United Parcel Service Inc. | 287.06% | 373.66% | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2022 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 33,653,933 ÷ 4,117,551 = 817.33%
4 Click competitor name to see calculations.
Analysis of market value creation from 2018 to 2022 reveals a consistent and aggressive expansion in shareholder value. Market Value Added (MVA) experienced substantial growth, while invested capital remained relatively stable, resulting in a significant increase in the MVA spread ratio.
- Market Value Added (MVA)
- A strong upward trajectory is observed in MVA, which increased from 9.28 billion US dollars in 2018 to 33.65 billion US dollars by the end of 2022. The most pronounced acceleration occurred between 2019 and 2020, where value grew by approximately 67% within a single fiscal year, indicating a rapid escalation in the market's valuation of the entity's future earning potential.
- Invested Capital
- Invested capital exhibited a moderate growth pattern, rising from 3.06 billion US dollars in 2018 to 4.12 billion US dollars in 2022. A slight contraction was noted in 2020, followed by a steady increase through 2022. The relatively slow growth of invested capital compared to the surge in MVA suggests highly efficient capital utilization.
- MVA Spread Ratio
- The MVA spread ratio demonstrates an exceptional growth trend, climbing from 303.69% in 2018 to 817.33% in 2022. This expansion indicates that the market value created is increasing at a rate far exceeding the growth of the underlying capital investment. The surge from 379.26% in 2019 to 638.82% in 2020 marks a pivotal shift in value generation efficiency, with the ratio continuing to expand throughout the remainder of the period.
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MVA Margin
Old Dominion Freight Line Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | 33,653,933) | 28,518,193) | 21,869,614) | 13,098,755) | 9,281,337) | |
| Revenue from operations | 6,260,077) | 5,256,328) | 4,015,129) | 4,109,111) | 4,043,695) | |
| Performance Ratio | ||||||
| MVA margin2 | 537.60% | 542.55% | 544.68% | 318.77% | 229.53% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| FedEx Corp. | 28.21% | 64.08% | — | — | — | |
| Uber Technologies Inc. | 191.05% | 305.35% | — | — | — | |
| Union Pacific Corp. | 384.62% | 599.66% | — | — | — | |
| United Airlines Holdings Inc. | 1.98% | 20.01% | — | — | — | |
| United Parcel Service Inc. | 128.11% | 170.51% | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 MVA. See details »
2 2022 Calculation
MVA margin = 100 × MVA ÷ Revenue from operations
= 100 × 33,653,933 ÷ 6,260,077 = 537.60%
3 Click competitor name to see calculations.
A consistent upward trajectory is observed in the creation of shareholder value from 2018 through 2022. The market valuation of the organization has expanded significantly, far outpacing the growth in operational revenue, which indicates a substantial increase in the market's perception of the company's future growth potential and value-creation capabilities.
- Market Value Added (MVA)
- MVA demonstrated aggressive and uninterrupted growth over the five-year period, rising from 9,281,337 thousand US dollars in 2018 to 33,653,933 thousand US dollars by the end of 2022. This represents a total increase of approximately 262%, with the most pronounced growth occurring between 2019 and 2021.
- Revenue from Operations
- Operational revenue remained relatively stable between 2018 and 2020, with a slight contraction observed in 2020. However, a significant acceleration in revenue growth followed, with values increasing to 5,256,328 thousand US dollars in 2021 and reaching 6,260,077 thousand US dollars in 2022, signaling a strong recovery and expansion phase.
- MVA Margin
- The MVA margin experienced a sharp escalation, moving from 229.53% in 2018 to a peak of 544.68% in 2020. Following this peak, the margin stabilized, maintaining a high level with minor fluctuations to 542.55% in 2021 and 537.60% in 2022. This trend suggests that the market value added per unit of revenue expanded rapidly during the early part of the period and has since reached a sustainable plateau.
The divergence between the steady growth of revenue and the rapid escalation of MVA, particularly between 2019 and 2020, highlights a period of intensified market confidence. While operational scale increased steadily, the market's premium on the company's value grew at a disproportionately higher rate, resulting in the significant expansion of the MVA margin.
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