THE ASSESSMENT OF BALTIC STOCK MARKET FROM PERSPECTIVE OF DIVIDEND YIELD AND TOTAL SHAREHOLDER RETURN RATIOS

Abstract

Despite the integration of the Lithuanian, Latvian, and Estonian stock markets into the NASDAQ OMX Baltic exchange, the region continues to attract limited investment compared to its Nordic counterparts. This paper examines the growth and performance of the Baltic and Nordic stock markets from 2012 to 2024, focusing on Total Shareholder Return (TSR) and Dividend Yield (DY) as indicators of portfolio value. The findings show that long-term TSR is positive across all countries, with Scandinavian markets, particularly Denmark, outperforming the Baltics significantly. Denmark leads with an impressive TSR of 539% over the 12-year period, while Estonia, with only a 67.2% TSR, recorded the weakest performance. The study also highlights the positive recovery of markets following the downturn in 2022, driven by the impact of Russia’s invasion of Ukraine. Short-term TSR and DY ratios indicate that Finland (9.5%) and Lithuania (5.2%) offered dividend yields surpassing the European Union’s average annual inflation rate of 3.4%, positioning dividends as a hedge against inflation for investors. These results underline the importance of the Nordic markets for capital growth, while also offering insights into the Baltic market’s potential for long-term wealth preservation.