It wasn’t the best quarter for Kenanga Investment Bank Berhad (KLSE:KENANGA) shareholders, as the share price fell 15%. But the fact remains that shareholders have seen very good returns over the past five years. In fact, the stock price has increased by 104% during that time. So while it’s never fun to watch a stock price fall, it’s important to look at it over a longer period of time. Time will tell whether there is still too much optimism about the current share price.
So let’s do some research and see if the company’s long-term performance is in line with the progress of its underlying business.
Check out our latest analysis for Kenanga Investment Bank Berhad.
In Buffett’s words, “Ships will sail around the world, but a flat-earth society will thrive.” There will continue to be a wide discrepancy between price and value in the marketplace…” One imperfect but simple way to consider how market perception has changed is to compare the change in the earnings per share (EPS) with the share price. price movement.
Kenanga Investment Bank Berhad achieved compound earnings per share (EPS) growth of 62% per year during the five-year share price period. The EPS growth is more impressive than the 15% annual share price increase over the same period. Therefore, we can conclude that the market as a whole is becoming more cautious towards stocks. The rather low P/E ratio of 9.37 also suggests some concerns in the market.
The company’s earnings per share (long-term) are depicted in the image below (click to see the exact numbers).
Growth rate of earnings per share
Before buying or selling a stock, we always recommend taking a closer look at past growth trends, available here.
What will happen to the dividend?
When looking at investment returns, it’s important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital increases and spin-offs. So for companies that pay a generous dividend, the TSR is often much higher than the share price return. We note that Kenanga Investment Bank Berhad’s TSR over the last five years was 172%, which is better than the share price return mentioned above. Therefore, the dividends paid by the company boosted the total return for shareholders.
different perspective
We’re pleased to report that Kenanga Investment Bank Berhad shareholders received a total shareholder return of 24% over one year. And this includes dividends. This is better than the 22% annualized return over the past five years, suggesting that the company has performed well of late. Optimists might think that the recent improvement in TSR indicates that the business itself is improving over time. It’s always interesting to track stock performance over the long term. But to understand Kenanga Investment Bank Berhad better, you need to consider many other factors. Case in point: We’ve discovered 1 warning sign for Kenanga Investment Bank Berhad that you should be aware of.
story continues
Of course, Kenanga Investment Bank Berhad may not be the best stock to buy. So you might want to take a look at this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.
Do you have feedback on this article? Interested in its content? Please contact us directly. Alternatively, email our editorial team at Simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
