Yahoo Finance The Gateley (Holdings) (LON:GTLY) Share Price Has Gained 43% And Shareholders Are Hoping For More
By buying an index fund, you can roughly match the market return with ease. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, Gateley (Holdings) Plc (LON:GTLY) shareholders have seen the share price rise 43% over three years, well in excess of the market return (7.7%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 9.3% , including dividends .
Check out our latest analysis for Gateley (Holdings)
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Gateley (Holdings) was able to grow its EPS at 13% per year over three years, sending the share price higher. This EPS growth is remarkably close to the 13% average annual increase in the share price. This suggests that sentiment and expectations have not changed drastically. 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).
This free interactive report on Gateley (Holdings)'s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Gateley (Holdings)'s TSR for the last 3 years was 64%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
While the market return was 9.2% in the last year, Gateley (Holdings) returned 9.3% to shareholders. Notably, the longer term shareholders are better off with their TSR of 18% per year over the last three years. Share price gains are anything but steady, so it's a positive to see that the longer term returns are reasonable. Before spending more time on Gateley (Holdings) it might be wise to click here to see if insiders have been buying or selling shares.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
