Yahoo Finance Booz Allen Hamilton Holding (NYSE:BAH) Has Gifted Shareholders With A Fantastic 188% Total Return On Their Investment
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. Long term Booz Allen Hamilton Holding Corporation (NYSE:BAH) shareholders would be well aware of this, since the stock is up 164% in five years. Then again, the 9.9% share price decline hasn't been so fun for shareholders.
Check out our latest analysis for Booz Allen Hamilton Holding
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Over half a decade, Booz Allen Hamilton Holding managed to grow its earnings per share at 18% a year. This EPS growth is reasonably close to the 21% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. Rather, the share price has approximately tracked EPS growth.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Booz Allen Hamilton Holding has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Booz Allen Hamilton Holding will grow revenue in the future.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. We note that for Booz Allen Hamilton Holding the TSR over the last 5 years was 188%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Booz Allen Hamilton Holding provided a TSR of 17% over the last twelve months. But that return falls short of the market. On the bright side, the longer term returns (running at about 24% 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. It's always interesting to track share price performance over the longer term. But to understand Booz Allen Hamilton Holding better, we need to consider many other factors. Even so, be aware that Booz Allen Hamilton Holding is showing 1 warning sign in our investment analysis , you should know about...
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. 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.
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