H&T Group (LON:HAT) Has Compensated Shareholders With A Respectable 93% Return On Their Investment

In This Article:

Want to participate in a short research study? Help shape the future of investing tools and earn a $40 gift card!

Stock pickers are generally looking for stocks that will outperform the broader market. And the truth is, you can make significant gains if you buy good quality businesses at the right price. To wit, the H&T Group share price has climbed 67% in five years, easily topping the market return of 48% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 2.0% in the last year , including dividends .

See our latest analysis for H&T Group

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During five years of share price growth, H&T Group achieved compound earnings per share (EPS) growth of 30% per year. This EPS growth is higher than the 11% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock. The reasonably low P/E ratio of 7.59 also suggests market apprehension.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
AIM:HAT Earnings Per Share Growth July 18th 2020

We know that H&T Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think H&T Group will grow revenue in the future.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between H&T Group's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. H&T Group's TSR of 93% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

H&T Group provided a TSR of 2.0% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 14% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. Before forming an opinion on H&T Group you might want to consider these 3 valuation metrics.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).