If EPS Growth Is Important To You, Banco Bilbao Vizcaya Argentaria (BME:BBVA) Presents An Opportunity

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Banco Bilbao Vizcaya Argentaria (BME:BBVA). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Banco Bilbao Vizcaya Argentaria with the means to add long-term value to shareholders.

View our latest analysis for Banco Bilbao Vizcaya Argentaria

Banco Bilbao Vizcaya Argentaria's Improving Profits

In the last three years Banco Bilbao Vizcaya Argentaria's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. Banco Bilbao Vizcaya Argentaria's EPS shot up from €0.83 to €1.30; a result that's bound to keep shareholders happy. That's a commendable gain of 56%.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Our analysis has highlighted that Banco Bilbao Vizcaya Argentaria's revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. While we note Banco Bilbao Vizcaya Argentaria achieved similar EBIT margins to last year, revenue grew by a solid 16% to €25b. That's encouraging news for the company!

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Banco Bilbao Vizcaya Argentaria?

Are Banco Bilbao Vizcaya Argentaria Insiders Aligned With All Shareholders?

Since Banco Bilbao Vizcaya Argentaria has a market capitalisation of €48b, we wouldn't expect insiders to hold a large percentage of shares. But thanks to their investment in the company, it's pleasing to see that there are still incentives to align their actions with the shareholders. To be specific, they have €44m worth of shares. That's a lot of money, and no small incentive to work hard. Despite being just 0.09% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

Is Banco Bilbao Vizcaya Argentaria Worth Keeping An Eye On?

For growth investors, Banco Bilbao Vizcaya Argentaria's raw rate of earnings growth is a beacon in the night. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Banco Bilbao Vizcaya Argentaria's continuing strength. The growth and insider confidence is looked upon well and so it's worthwhile to investigate further with a view to discern the stock's true value. We should say that we've discovered 2 warning signs for Banco Bilbao Vizcaya Argentaria (1 is concerning!) that you should be aware of before investing here.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of Spanish companies which have demonstrated growth backed by recent insider purchases.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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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.