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.
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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MVA
Pioneer Natural Resources Co., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 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).
1 Fair value of debt. See details »
2 Invested capital. See details »
- Market (fair) value
- The market value of the company experienced significant growth from 2019 to 2021, increasing from approximately $25.9 billion to $63.1 billion. This upward trend indicates strong investor confidence and market performance during this period. However, in 2022, the market value declined to about $54.8 billion, representing a notable decrease after the prior growth. In 2023, the market value partially recovered to approximately $60.9 billion, signaling some recovery in market conditions but still below the 2021 peak.
- Invested capital
- Invested capital remained relatively stable between 2019 and 2020, around $16.7 billion to $17.0 billion. There was a substantial increase in invested capital in 2021, nearly doubling to approximately $32.7 billion. This level remained fairly constant in 2022 and 2023, with only slight fluctuations. The sharp rise in 2021 indicates significant investments or capital expenditures during that year, possibly reflecting expansion or acquisition activities.
- Market value added (MVA)
- Market value added, which reflects the difference between market value and invested capital, showed a strong upward trend from 2019 to 2021, increasing from about $9.2 billion to $30.4 billion. This suggests effective capital utilization and value creation for shareholders during this period. However, similar to the market value trend, MVA declined notably in 2022 to $22.6 billion, indicating reduced value generation relative to invested capital. In 2023, MVA increased again to $27.5 billion, pointing to a partial recovery in creating market value above the invested capital.
- Summary of trends
- Overall, the company demonstrated strong growth and value creation between 2019 and 2021, marked by both an increase in market value and a substantial rise in invested capital. The subsequent year, 2022, saw a reversal in market valuation and market value added, suggesting potential challenges or market adjustments. A recovery phase is observable in 2023, with improvements in market value and MVA, though not fully reaching the peak levels of 2021. The stability in invested capital post-2021 implies a period of consolidation following the significant investment activity.
MVA Spread Ratio
Pioneer Natural Resources Co., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2023-12-31), 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).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Market Value Added (MVA)
- The Market Value Added exhibits an upward trend from 2019 to 2021, increasing significantly from 9,175 million USD in 2019 to 30,400 million USD in 2021. This upward trajectory suggests improvement in the company's market valuation and value creation over these years. However, in 2022, there is a noticeable decline to 22,565 million USD, indicating a reduction in market value added. The figure slightly recovers in 2023 to 27,529 million USD but remains below the 2021 peak.
- Invested Capital
- Invested Capital shows a relatively stable level from 2019 to 2020, with values around 16,681 and 17,004 million USD respectively. There is a substantial increase in 2021, jumping to 32,653 million USD, which remains relatively stable through 2022 and 2023 with slight increases to 32,194 and 33,333 million USD. This rise in invested capital around 2021 suggests significant capital deployment or asset acquisition during this period.
- MVA Spread Ratio
- The MVA spread ratio, representing the spread between the return on invested capital and the cost of capital expressed as a percentage, follows a pattern consistent with MVA. It rises sharply from 55% in 2019 to a peak of 117.88% in 2020, indicating strong value creation. In 2021, the ratio decreases to 93.1%, continuing to decline to 70.09% in 2022, then slightly improving to 82.59% in 2023. Despite the decrease from the peak, the ratio remains elevated above the initial 2019 level.
- General Observations
- The data show robust growth in market value added and invested capital through 2021, coinciding with a peak in the MVA spread ratio, indicating high efficiency in generating value over the invested capital. The subsequent decline in MVA and spread ratio in 2022 suggests some challenges in maintaining this value creation momentum, though partial recovery in 2023 is observed. The considerable increase in invested capital beginning in 2021 may reflect strategic investments or expansion efforts, which initially delivered strong market returns but encountered some headwinds in the later period. Overall, the company exhibits capacity for significant value generation, tempered by recent fluctuations in market valuation efficiency.
MVA Margin
Pioneer Natural Resources Co., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | ||||||
| Revenue from contracts with purchasers | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2023-12-31), 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).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Revenue from contracts with purchasers
= 100 × ÷ =
3 Click competitor name to see calculations.
- Market Value Added (MVA)
- The market value added exhibited substantial growth between 2019 and 2021, increasing from approximately $9.2 billion to $30.4 billion. However, in 2022, there was a notable decline to around $22.6 billion, followed by a recovery in 2023 to approximately $27.5 billion. This indicates a peak in 2021 with some volatility thereafter.
- Revenue from Contracts with Purchasers
- Revenue showed a contrasting trend compared to MVA initially, declining from about $9.7 billion in 2019 to $7 billion in 2020. It then experienced significant growth over the next two years, peaking at about $24.4 billion in 2022 before decreasing to around $19.4 billion in 2023. This suggests high fluctuations in revenue performance.
- MVA Margin
- The MVA margin, which reflects the ratio of market value added relative to revenue, was highest in 2020 at 285.36%, indicating an exceptional increase in market value relative to revenue during that year. The margin dropped significantly in 2021 to 170.12% and then sharply declined to 92.54% in 2022. In 2023, it rebounded to 142.09%, showing recovery but not reaching prior peak levels. This fluctuating margin highlights varying efficiency in translating revenue into market value added.
- Overall Insights
- The data demonstrates fluctuating performance across the analyzed years, with the most significant growth in market value occurring in 2021. Revenue trends exhibit more volatility, particularly with a sharp decrease in 2020 followed by recovery and growth until 2022, and a subsequent decline in 2023. The MVA margin's volatility suggests that changes in market valuation were not always proportional to revenue changes, reflecting periods of varying investor confidence or operational efficiency.