The Diversification Dividend

Companies which diversify their revenue streams offer greater returns to their shareholders than those that don’t.

The Diversification Dividend report is essential for understanding how revenue diversification boosts financial stability and market success for businesses. It underlines diversification as a key strategy for resilience, improved shareholder returns, and maintaining a competitive edge in the dynamic market.

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The Diversification Dividend Report underscores the substantial financial benefits of diversifying revenue streams. Analyzing stock price growth and diversification activities of companies across the globe, we found that companies that diversify revenues achieve higher total shareholder return compared to those without.

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The Diversification Dividend

2024 Edition

Stryber, a leading strategic growth consultancy and corporate venture builder, analysed sales and total shareholder return data for its newly released report, “The Diversification Dividend”. The findings offered a stark warning: a lack of diversification can be disastrous for shareholder value.

The importance of diversification was underscored during COVID. In the preceding period of calm between 2010-2019, businesses that had consciously added revenue streams during this period delivered 16% superior annual median total shareholder returns. In the turbulent years of 2020-2023, that number shot up to 53%.

The findings are published in the latest report from Stryber, entitled “The Diversification Dividend” - which continues research first conducted in 2021, in its “The Power of Diversification” report.

"Our research demonstrates that diversification is not only a strategy for growth but also a hedge against market volatility. Companies that focus solely on their core business may see short-term efficiency gains, but they risk long-term value destruction. On the other hand, if they have the capability to add new revenue streams, whether through M&A or venture building, they are better positioned to weather economic uncertainty and deliver long-term value to shareholders”

Jan Sedlacek

Co-founder and Managing Partner at Stryber

"Our research demonstrates that diversification is not only a strategy for growth but also a hedge against market volatility. Companies that focus solely on their core business may see short-term efficiency gains, but they risk long-term value destruction. On the other hand, if they have the capability to add new revenue streams, whether through M&A or venture building, they are better positioned to weather economic uncertainty and deliver long-term value to shareholders”

Jan Sedlacek

Co-founder and Managing Partner at Stryber