PKF Financial Advisory has developed a sector beta report. This report provides insight into betas, volatility, company values and debt equity ratios for 61 different sectors. In total, roughly 2000 listed European companies were analysed and included in the dataset of the report. In order to keep the sector beta report up to date, a new edition will be published every six months.
Betas reflect the sensitivity of company returns compared to the market. Additionally, betas also reflect the company’s systematic risk. The beta is an important variable to determine the cost of capital and influences the company’s value.
The Sector Beta report does not only provide insight in betas, but also provides insight in volatility and other relevant data about the sector. In the report we emphasize the unlevered volatility of corporate returns. By using the volatility without leverage, insights can be gained in the business risks that do not depend on the leverage of the company. This information is useful in estimating how risky a company is compared to the market.
The information in this report also provides insight in the risks that a non-diversified investor takes by investing in a certain sector. This is relevant in valuing non-listed SME’s or in making investment decisions.
We differentiate our report from other beta reports by correcting our dataset for companies in financial distress and companies with low liquidity shares. In addition, the data in the report is sorted on company size. This makes the data more applicable for analysing and valuing non-listed SMEs.
The report is interesting for valuation professionals, portfolio managers and CFOs. Furthermore, the report is interesting for financial specialists who focus on valuing or investing in (non-listed) SMEs. Entrepreneurs can also use the report when making investment or expansion analyses.
If you have any questions regarding the PKF Financial Advisory Sector Beta report, the Valuation Team is happy to assist you. Do not hesitate to contact us, our contact details can be found at the bottom of this page.
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