Harrington emphasizes key advantages of D&P Risk Premium Report

The Duff & Phelps Risk Premium Report and the Ibbotson SBBI Valuation Yearbook dominate the market for ERP and related cost of capital data.  But, the fact that the D&P Report publishes specific information about the companies that comprise its portfolios “ enables analysts to gauge how similar (or dissimilar) their subject companies are to the companies that make up the portfolios, enabling an even further refinement of the cost of capital estimate,” Jim Harrington (Duff & Phelps) told CalCPA BV conference attendees earlier this month.

Harrington promoted some other benefits, in his opinion of the D&P product, as shown in the table below

SBBI Duff & Phelps
Size study Yes Yes
Risk study No Yes
Size measures used Market Cap Market Cap + 7 alternative size measures
Risk measures used N/A Operating Margin CV Operating Margin


Number of portfolios 9 Deciles + 10x, 10x, 10y, 10z 25
Exclusion of new and high-financial-risk companies No Yes
Analysis of high-financial-risk companies No Yes
Specific information about the companies that comprise the portfolios No Yes