What is an equity story?

Alexandra Engesser
November 13, 2019
Share, Investors
Equity stories are aimed particularly at existing and potential new investors in a joint stock company; the purpose of an equity story is to convey to investors as fitting, concise and impressive a corporate image as possible. The aim is to win over readers as investors (or to retain them) by outlining the corporate strategy and providing an overview of all the achievements thus far as well as an outlook on future successes.

What is an equity story, and what does this contain?

An equity story is a means of presenting the corporate image of a company with its stakeholder groups in mind. These interest groups specifically include existing and future investors as well as any financial analysts and journalists who report on the company.

An equity story delves into the company’s history, presenting its past milestones in the process. Past achievements often constitute an important basis for future success and, as such, play a key role when it comes to assessing companies. For instance, in spite of financial crises, the Baloise Group has not reduced its dividend payments since 2003, instead maintaining or even increasing these. In this respect it has shown that a strong track record in terms of reliability pays off for investors too. Like the review aspect, the core competencies of a company are another key component of an equity story. Within the Baloise Group these might include target customer management in non-life business, a focus on its core markets, or the combination of banking and insurance which is unique to Switzerland. Finally, an equity story should provide a clear and understandable indication of corporate strategy, i.e. in particular the outlook for the future. For Baloise, this is the Simply Safe strategy, the emphasis of which is on its employees, customers and investors.

With regard to time frame, an equity story is oriented towards the medium to long term; adjustments following market changes or new competition situations may, however, be added at any time – in fact these are advisable. One example of this is the interest environment. Interest rates have dropped markedly over the past few years, and insurance companies must adapt to this development in order to be able to continue operating profitably in future.

Why is an equity story important?

For a joint stock company an equity story is an important means of presenting a fitting, concise and impressive corporate image to all stakeholder groups, specifically investors. The more convincing and promising the equity story, the more likely a company is to succeed in gaining new investors and maintaining existing ones. In turn, new and long-term investments increase and stabilise the share price, something which the company benefits from.

An equity story does not just make sense from a corporate perspective, it is also advantageous for (potential) investors. Investors can use this to obtain an overview of the most important facts about the company and gain further specific information through further documents and research. If investors opt to acquire Baloise shares, they can benefit from positive share price performance and annual dividend payments. In 2019, Baloise paid out a dividend of CHF 6.00 per share while also reporting a strong gain in price.

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