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
Kinder Morgan Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The financial data indicates a period of significant volatility in shareholder value creation between 2015 and 2019. The Market Value Added (MVA) exhibits substantial fluctuations, reflecting a dynamic relationship between the market's valuation of the entity and the actual capital invested in its operations.
- Market Value Trends
- The fair market value experienced an initial sharp increase from US$ 73,256 million in 2015 to a peak of US$ 92,171 million in 2016. This was followed by a correction in 2017 and 2018, where values stabilized around US$ 80,000 million, before recovering to US$ 87,968 million by the end of 2019.
- Invested Capital Trajectory
- Invested capital remained relatively stable with a slight overall downward trend. The value decreased from US$ 72,098 million in 2015 to US$ 67,164 million in 2019. This gradual reduction in the capital base, contrasted with the rising market value toward the end of the period, contributed to the expansion of the MVA.
- Market Value Added (MVA) Performance
- A dramatic expansion in MVA is observed between 2015 and 2016, rising from US$ 1,158 million to US$ 22,532 million. This peak was followed by a contraction in 2017 and 2018, with MVA falling to US$ 11,067 million and US$ 10,803 million, respectively. However, a strong recovery occurred in 2019, with MVA increasing to US$ 20,804 million, indicating a renewed increase in the market's premium over the invested capital.
The analysis reveals that the fluctuations in MVA were primarily driven by changes in market valuation rather than shifts in the invested capital base. The significant rebound in 2019 suggests a strengthening of investor confidence and an increase in the perceived future earning potential relative to the capital employed.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
MVA Spread Ratio
Kinder Morgan Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 20,804) | 10,803) | 11,067) | 22,532) | 1,158) | |
| Invested capital2 | 67,164) | 69,659) | 69,077) | 69,639) | 72,098) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 30.97% | 15.51% | 16.02% | 32.36% | 1.61% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2019 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 20,804 ÷ 67,164 = 30.97%
4 Click competitor name to see calculations.
The financial performance between 2015 and 2019 is characterized by significant volatility in market valuation metrics, contrasted by a relatively stable capital base. The fluctuations in value creation indicate a dynamic relationship between the market's perception of the company and its underlying invested capital.
- Market Value Added (MVA)
- The MVA experienced substantial swings over the analyzed period. After starting at US$ 1,158 million in 2015, there was a sharp increase to US$ 22,532 million in 2016. A subsequent correction occurred in 2017 and 2018, with values declining to US$ 11,067 million and US$ 10,803 million, respectively. A strong recovery was observed by the end of 2019, as the MVA rose again to US$ 20,804 million.
- Invested Capital
- Invested capital remained remarkably consistent, exhibiting a slight downward trend. The value decreased from US$ 72,098 million in 2015 to US$ 67,164 million in 2019. The stability of this metric suggests that the volatility observed in MVA was driven by changes in market capitalization rather than significant adjustments to the company's internal investment scale.
- MVA Spread Ratio
- The MVA spread ratio closely tracked the movements of the MVA due to the stability of the invested capital. The ratio rose dramatically from 1.61% in 2015 to 32.36% in 2016. It then moderated to approximately 16% in 2017 and 15.51% in 2018, before rebounding to 30.97% in 2019. This pattern demonstrates periods of aggressive value creation relative to capital investment, interspersed with phases of valuation contraction.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
MVA Margin
Kinder Morgan Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 20,804) | 10,803) | 11,067) | 22,532) | 1,158) | |
| Revenues | 13,209) | 14,144) | 13,705) | 13,058) | 14,403) | |
| Performance Ratio | ||||||
| MVA margin2 | 157.50% | 76.38% | 80.75% | 172.55% | 8.04% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 MVA. See details »
2 2019 Calculation
MVA margin = 100 × MVA ÷ Revenues
= 100 × 20,804 ÷ 13,209 = 157.50%
3 Click competitor name to see calculations.
An analysis of the financial metrics from 2015 to 2019 reveals significant volatility in market valuation and the corresponding MVA margin, contrasting with a relatively stable revenue trajectory.
- Market Value Added (MVA) Trends
- A substantial increase in MVA is observed between 2015 and 2016, rising from 1,158 million USD to a peak of 22,532 million USD. This peak was followed by a sharp contraction in 2017 and 2018, with values declining to 11,067 million USD and 10,803 million USD, respectively. A strong recovery occurred in 2019, with MVA increasing to 20,804 million USD.
- Revenue Stability
- Revenues remained comparatively stagnant throughout the analyzed period, oscillating within a narrow range between 13,058 million USD and 14,403 million USD. The absence of a clear growth trend in revenues suggests that the fluctuations in market value were not driven by operational expansion or top-line growth.
- MVA Margin Analysis
- The MVA margin exhibited extreme variance, mirroring the volatility of the MVA. The margin surged from 8.04% in 2015 to 172.55% in 2016, before correcting to 80.75% in 2017 and 76.38% in 2018. By 2019, the margin increased significantly to 157.50%. This pattern indicates that the company's market valuation relative to its revenues was subject to high sensitivity, potentially reflecting changes in investor expectations or external market conditions rather than internal revenue performance.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?