Earnings growth topped the strong 113% return delivered to shareholders of Vistry Group (LON: VTY) over the past year
When you buy shares in a company, there is always a risk that the price will drop to zero. But if you choose the right company to buy stocks, you can earn more than you can lose. Take for example Vistry SA Group (LON: VTY). Its share price has already risen an impressive 105% in the past twelve months. Meanwhile, the stock price is 6.6% higher than it was a week ago. It’s also impressive that the stock is up 37% over three years, which adds to the feeling that he’s a real winner.
Given that the stock added £ 163million to its market cap in the last week alone, let’s see if the underlying performance has generated any long-term returns.
Check out our latest review for Vistry Group
In his essay Graham-and-Doddsville super-investors Warren Buffett described how stock prices don’t always rationally reflect a company’s value. An imperfect but straightforward way to consider how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.
Over the past year, Vistry Group increased its earnings per share (EPS) by 164%. It’s fair to say that the 105% share price rise has not kept pace with EPS growth. As a result, it looks like the market isn’t as excited about Vistry Group as it used to be. It could be an opportunity.
You can see below how the EPS has evolved over time (see the exact values by clicking on the image).
We love that insiders have bought stocks in the past twelve months. Even so, future profits will be much more important to whether current shareholders make money. It might be worth taking a look at our free Vistry Group earnings, revenue and cash flow report.
What about dividends?
In addition to measuring stock price performance, investors should also consider the total shareholder return (TSR). TSR is a yield calculation that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of any discounted capital increase and spinoff. It’s fair to say that the TSR gives a more complete picture of dividend paying stocks. In the case of Vistry Group, it has a TSR of 113% for the past year. This exceeds the return on its share price that we mentioned earlier. The dividends paid by the company thus boosted the total shareholder return.
A different perspective
We are pleased to report that Vistry Group shareholders received a total shareholder return of 113% over one year. Of course, this includes the dividend. This gain is better than the annual TSR over five years which is 15%. Therefore, it seems that sentiment around the company has been positive lately. Since the stock price momentum remains strong, it might be worth taking a closer look at the stock lest you miss an opportunity. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. Consider risks, for example. Every business has them, and we’ve spotted 1 warning sign for Vistry Group you should know.
Vistry Group isn’t the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on UK stock exchanges.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.