Spirax-Sarco Engineering (LON:SPX) shareholders have earned a 16% CAGR over the last five years

Simply Wall St
·3 min read

When we invest, we're generally looking for stocks that outperform the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long term Spirax-Sarco Engineering plc (LON:SPX) shareholders have enjoyed a 99% share price rise over the last half decade, well in excess of the market decline of around 5.1% (not including dividends).

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

View our latest analysis for Spirax-Sarco Engineering

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, Spirax-Sarco Engineering achieved compound earnings per share (EPS) growth of 11% 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 the company in higher regard, these days. And that's hardly shocking given the track record of growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Spirax-Sarco Engineering's TSR for the last 5 years was 111%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

While the broader market lost about 2.8% in the twelve months, Spirax-Sarco Engineering shareholders did even worse, losing 28% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 16%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.

Spirax-Sarco Engineering is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

  • Up next
  • Up next
  • Up next
  • Up next

Latest Stories

  • Taylor Swift drops 15 new songs on double album, 'The Tortured Poets Department: The Anthology'

    Could there be a Taylor Swift new album rollout without a few additional surprises? On Friday, the pop star released her 11th album, “The Tortured Poets Department,” an amalgamation of her previous work and reflecting the artist who — at the peak of her powers — has spent the last few years re-recording her life’s work and touring its material, filtered through synth-pop anthems, breakup ballads, provocative and matured considerations. At 2 a.m. Eastern, she released “The Tortured Poets Department: The Anthology,” featuring 15 additional songs.

  • Factbox-EU probes on Chinese subsidies and imports

    The EU has also launched several investigations into whether Chinese clean tech producers are dumping subsidised goods on its market and whether Chinese-owned companies unfairly benefit from subsidies while operating inside the EU. The European Commission, which is carrying out the investigations, says its aim is to prevent unfair competition and market distortion. The EU could launch a probe into China's procurement of medical devices as early as mid-April, Bloomberg News reported on April 15, citing people familiar with the matter.

  • US STOCKS-Wall St set for flat open as Middle East jitters ease, Netflix slumps

    Wall Street's main indexes eyed a flat open on Friday as initial jitters about an escalation in the Middle East conflict subsided, while Netflix dropped after forecasting current-quarter revenue below estimates. At 8:31 a.m. ET, Dow e-minis were down 3 points, or 0.01%, S&P 500 e-minis were up 1.75 points, or 0.03%, and Nasdaq 100 e-minis were down 15.25 points, or 0.09%.

  • Grey Highlands councillors troubled by rural intersection

    Grey Highlands council would like more information and data about an intersection that local residents say has safety issues. At its meeting on April 17, Grey Highlands council voted 4-3 in favour of a full staff report about the T-intersection at Sideroad 22A and the Holland/Euphrasia Townline just west of Goring. Two local residents, Christopher Tschirhart of Chatsworth and Maxime Brabant of Grey Highlands, wrote a letter to council, Chatsworth Mayor Scott Mackey and the local OPP expressing s

  • The Anne Frank House announces John Kastner as new Canadian co-ordinator

    The Anne Frank House announced earlier this month that John Kasner, retired general manager of the Stratford Perth Museum, is the new coordinator for the Anne Frank House activities in Canada. Education and reflection on history are crucial elements of the Anne Frank Exhibit, which was displayed twice at the Stratford Perth Museum under Kastner’s management. “The museum has a really special relationship with the Anne Frank House for so many reasons,” said Kastner. “One was the very significant D

  • Forestar Group Inc. (NYSE:FOR) Q2 2024 Earnings Call Transcript

    Forestar Group Inc. (NYSE:FOR) Q2 2024 Earnings Call Transcript April 18, 2024 Forestar Group Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good afternoon, and welcome to Forestar’s Second Quarter 2024 Earnings Conference Call. At this time, all participants […]

  • Ja’Kobe Walter: NBA draft scouting report and intel

    2004 | 6'5 | 6'10 WS | 195 LBS Team: Baylor Best aggregate mock draft rank: 1 / Worst rank: 16 2023-24 stats: In 2023-24, Walter averaged 14.5 points in 35 games with 32.3 minutes per contest game. He recorded 4.4 rebounds, 1.4 assists, 0.2 blocks, ...

  • School builder on brink of collapse as inflation hammers developers

    One of Britain’s biggest school builders is on the brink of collapse as high inflation and a squeeze on public spending batter the property market.

  • Boris Johnson broke rules over Venezuela talks, government advisers say

    The former PM has been evasive about his links to a hedge fund that set up the meeting, Acoba rules.

  • Eating disorders still a "huge problem" in climbing, gold medallist Garnbret says

    Eating disorders remain a "huge" issue in climbing, Olympic gold medallist Janja Garnbret said, even as new regulations meant to stop dangerously underweight athletes competing came into effect earlier this month. Climbers benefit from a higher strength-to-weight ratio and many resort to losing weight rather than getting stronger, not realising the damage that could do to their health. Under the regulations, in force since April 9, climbers provide details of their height, weight, heart rate and blood pressure, and national federations either issue a health certificate based on those parameters, or request more testing.

  • Ghana deal with bondholders 'a matter of time', says IMF official

    Ghana agreeing a restructuring with holders of its international bonds is "a matter of time" rather than there being insurmountable hurdles, an IMF official said, after the fund said a previous proposed deal would not fit its parameters. "It depends on ... how much time and intensity the government is going to be able to devote to (negotiations) in the coming weeks," African Department director Abebe Selassie said in an interview at the International Monetary Fund (IMF) Spring Meetings in Washington. Earlier this week, Ghana's government said it had not been able to reach a workable restructuring agreement with two groups of holders of about $13 billion in overseas bonds and that talks would continue until it finds a deal consistent with the IMF's debt sustainability targets.

  • CFUW Stratford on a mission to stop unnecessary idling in the city

    A subcommittee of the Canadian Federation of University Women (CFUW) Stratford focusing on climate change has just launched an anti-idling campaign to educate the community on the effects of idling in a vehicle for more than one minute. This campaign is in accordance with Stratford’s idling-control bylaw, which prohibits vehicles from idling for more than one minute in the City of Stratford. The committee is raising awareness among parents and the public about the harmful effects of idling exhau

  • PFL heads to Mohegan Sun, Salt Lake City, Sioux Falls for second half of 2024 regular season

    The PFL will continue its 2024 season in June with events in three new locations.

  • UPDATE 1-WHO says wider alert on contaminated J&J cough syrup 'likely'

    The World Health Organization is likely to issue a wider warning about contaminated Johnson and Johnson-made children's cough syrup found in Nigeria last week, it said in an email. Nigeria's regulator recalled a batch of Benylin syrup last Wednesday, having found a high level of diethylene glycol in the product during routine testing. The batch of Benylin syrup recalled was made by J&J in South Africa in May 2021, although Kenvue now owns the brand after a spin-off from J&J last year.

  • Police operation underway at Iranian consulate in Paris after man seen with explosives vest

    Paris police said Friday they are carrying out an operation at the Iranian consulate after a witness reported seeing a man outside carrying a grenade and an explosives vest. A Paris police official said the man was spotted around 11 a.m. (0900 GMT) on Friday and police launched a special operation as soon as they were alerted. The official was not authorized to be publicly named according to police policy.

  • Fire crews investigating structure fire

    Fire crews investigating structure fire

  • UPDATE 1-Blinken says China is Russia's primary military complex supplier

    U.S. Secretary of State Antony Blinken criticised on Friday Chinese support for Russia's defence industry, saying Beijing was currently the primary contributor to Moscow's war in Ukraine though its provision of critical components for weaponry. Speaking at a news conference capping the end of a gathering of G7 foreign ministers on the Italian island of Capri, Blinken said Washington had made it very clear to Beijing and others that they should not be aiding Russia's war effort in Ukraine.

  • New-Form Tools gets a boost from the provincial government

    What started as an idea and a single drill press in the family home basement has now grown to be a multi-million-dollar company in Stratford. New-Form Tools is one of only three manufacturing facilities worldwide that offers specialty circular saw blades and cutting systems for high-tensile and high-strength materials. They recently received a provincial grant to help boost production and advance tooling. “Sometimes I have to pinch myself and think, ‘This is really happening; we’re shipping our

  • Teachers voice fears over surge in home-schooled children

    The number of children being home schooled in England in the last academic year reached more than 126,000, an increase of almost 10,000

  • Five Point Holdings, LLC (NYSE:FPH) Q1 2024 Earnings Call Transcript

    Five Point Holdings, LLC (NYSE:FPH) Q1 2024 Earnings Call Transcript April 18, 2024 Five Point Holdings, LLC isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Greetings, and welcome to the Five Point Holdings, LLC First Quarter 2024 Conference Call. As […]