Investing in Carlisle Companies (NYSE: CSL) five years ago would have gotten you 111%
The easiest way to invest in stocks is to buy exchange traded funds. But in our experience, buying the right stocks can give your wealth a boost. For example, the Carlisle Companies Incorporated The stock price (NYSE: CSL) is 97% higher than it was five years ago, which is above the market average. It’s fair to say that the stock has continued its long-term trend over the past year, above which it has risen 67%.
So let’s assess the underlying fundamentals over the past 5 years and see if they have moved in line with shareholder returns.
Check out our latest review for Carlisle businesses
To paraphrase Benjamin Graham: In the short term the market is a voting machine, but in the long term it is a weighing machine. An imperfect but reasonable way to gauge how sentiment is changing around a company is to compare earnings per share (EPS) with the stock price.
Over the five years of stock price growth, Carlisle Companies has achieved compound earnings per share (EPS) growth of 1.5% per year. This EPS growth is slower than the share price growth of 15% per year, over the same period. This suggests that market participants hold society in the highest regard these days. And that’s hardly shocking given the growth history.
The image below shows how EPS has tracked over time (if you click on the image you can see more detail).
It might be worth taking a look at our free Carlisle Companies Profit, 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. So, for companies that pay a generous dividend, the TSR is often much higher than the return on the share price. We note that for Carlisle Companies, the TSR over the past 5 years was 111%, which is better than the share price return mentioned above. And there’s no price guessing that dividend payments are a big part of the reason for the discrepancy!
A different perspective
It is nice to see that Carlisle Companies shareholders have received a total shareholder return of 69% over the past year. And that includes the dividend. This is better than the 16% annualized return over half a decade, which implies that the company has been doing better recently. At the best of times, this can portend real business momentum, meaning that now may be a good time to dig deeper. It is always interesting to follow the evolution of stock prices over the long term. But to better understand Carlisle businesses, there are many other factors that we need to consider. For example, we have identified 2 warning signs for Carlisle businesses that you need to be aware of.
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 traded on US stock exchanges.
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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.
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