Results Show Investors Are Willing to Pay a Premium for Companies with
High-Quality Investor Relations
TORONTO, June 7, 2011 /CNW/ - According to a new survey conducted by The
Equicom Group Inc. (Equicom), a wholly-owned subsidiary of TMX Group
Inc., with the assistance of the Canadian Investor Relations Institute
(CIRI), investors are willing to pay a premium for companies with
better investor relations (IR) practices.
The survey, which polled members of the Canadian professional investment
community (financial analysts, portfolio managers, investment advisors
and investment bankers) and Investor Relations Officers (IROs) across
Canada, was aimed at better understanding IR's impact on corporate
valuation and what constitutes high-quality IR. This is the first
survey on the topic conducted in Canada.
Among the key findings, 98% of respondents from the investment community agree IR has an effect
on a company's market valuation. Ninety-three per cent of investment
community respondents claimed they would pay a premium for a company
with more credible IR practices, with 69% indicating they would pay a
premium of 10% or higher. Conversely, 67% of investment community
participants said they would assign a discount of 10% or more to a
company with less credible IR practices.
"The results of this survey clearly attest to the importance of a
well-planned and executed investor relations strategy," said Craig
Armitage, Senior Vice-President of Equicom. "Combining strong business
fundamentals with effective communication practices - proper messaging,
comprehensive disclosure, and a proactive approach to engaging the
Street - can help an issuer achieve a premium valuation relative to
Thirty-two per cent of respondents from the investment community ranked
"timely and comprehensive disclosure" as the most highly valued aspect
of an IR program. Ranking second and third were "accessibility of
management and IROs in response to questions" and "commitment to
transparency and candor." When asked about communication tools, the
investment community indicated that face-to-face meetings with
management - through roadshows, investor presentations and Investor
Days - were the most valuable.
The IROs who participated in the survey had similar views to the
investment community. Ninety-three per cent of IRO respondents believe
investors will pay a premium for a company with more credible IR
practices, with 72% of respondents assigning a premium of 10% or more.
"We have always believed that high-quality IR makes an impact and that
the IR function is a strategically important one within public
companies, and these results validate that view," said Tom Enright,
CIRI President and CEO. "It is great to see the excellent work of our
members is being recognized and rewarded by the investment community."
About the Survey
The Impact of Investor Relations on Valuation was an online survey
conducted by TMX Equicom with the assistance of CIRI. The survey
results include responses from 42 participants from the investment
community and 43 investor relations professionals. The complete results
of the survey can be viewed and downloaded at http://www.equicomgroup.com/survey/.
About The Equicom Group Inc.
The Equicom Group, a wholly-owned subsidiary of TMX Group Inc., is a
leading Canadian provider of investor relations and strategic corporate
communications services. With proven expertise in developing and
executing highly effective strategic communications programs, and an
extensive network of investment community contacts, Equicom specializes
in helping clients achieve their capital markets objectives. Equicom
offers a comprehensive suite of services including: investor relations,
media relations, annual report production, multimedia and web design,
live event management and corporate branding. Equicom is headquartered
in Toronto, with offices in Calgary and San Diego.
About Canadian Investor Relations Institute (CIRI)
CIRI is a professional, not-for-profit association of executives
responsible for communication between public corporations, investors
and the financial community. CIRI contributes to the transparency and
integrity of the Canadian capital market by advancing the practice of
investor relations, the professional competency of its members and the
stature of the profession. With 600 members, CIRI is the world's second
largest society of investor relations professionals. For further
information, please visit www.ciri.org.
SOURCE Equicom Group Inc.
For further information:
The Equicom Group Inc.
1 416-815-0700 extension 278