A critical analysis of AstraZeneca PLC shareholder wealth creation in the five-year period from Between 2020–2024

Abstract

The aim of this project is to critically analyse AstraZeneca PLC’s shareholder wealth creation (SWC) between 2020 and 2024 through theoretical and financial evaluation. The study applies agency theory, stakeholder theory, and dividend policy to examine AstraZeneca’s ability to balance financial performance, strategic growth, and societal responsibilities in delivering sustainable value to shareholders. AstraZeneca enjoys strong industry positioning within the UK pharmaceutical sector, underpinned by innovation, acquisitions and sustainability initiatives such as the Ambition Zero Carbon programme. Analysis of share price performance revealed growth of over 80% between 2020 and 2024, consistently outperforming the FTSE 100, FTSE 350 Pharmaceuticals and Biotech, and peers including GSK and Hikma, based on Bloomberg data. This growth highlights robust governance, strategic alignment and market confidence, consistent with agency theory principles. Dividend evaluation confirmed AstraZeneca’s progressive policy, with stability and modest growth resulting in $3.10 per share in 2024, as reported in company annual reports. This approach reassured investors during volatile periods while preserving reinvestment capacity for R&D and acquisitions, reflecting the balance between signalling strength and sustaining innovation. Financial statement and ratio analyses, conducted using FAME and AstraZeneca’s audited reports through comparative index analysis, common-size statements, and peer benchmarking, further evidenced resilience: revenues rose steadily, gross margins exceeded 75%, and gearing reduced from 212% in 2020 to 92% in 2024, reinforcing financial discipline and long-term sustainability. The implications of these findings are notable for both corporate governance and investment practice. AstraZeneca demonstrates that shareholder wealth creation is achievable through a blended strategy that balances short-term investor returns with long-term reinvestment in innovation, sustainability, and global expansion. This integration of financial strength and ESG commitments positions AstraZeneca as a resilient, shareholder-oriented firm with strong capacity for continued value creation.