Is Now The Time To Put Banco Santander (BME:SAN) On Your Watchlist?

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.' While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Banco Santander (BME:SAN). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Banco Santander with the means to add long-term value to shareholders.

See our latest analysis for Banco Santander

How Fast Is Banco Santander Growing Its Earnings Per Share?

Over the last three years, Banco Santander has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Banco Santander's EPS has risen over the last 12 months, growing from €0.51 to €0.59. There's little doubt shareholders would be happy with that 14% gain.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. It's noted that Banco Santander's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. Banco Santander maintained stable EBIT margins over the last year, all while growing revenue 6.1% to €43b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Banco Santander's future profits.

Are Banco Santander Insiders Aligned With All Shareholders?

Since Banco Santander has a market capitalisation of €59b, we wouldn't expect insiders to hold a large percentage of shares. But we are reassured by the fact they have invested in the company. We note that their impressive stake in the company is worth €527m. This comes in at 0.9% of shares in the company, which is a fair amount of a business of this size. This still shows shareholders there is a degree of alignment between management and themselves.

Should You Add Banco Santander To Your Watchlist?

As previously touched on, Banco Santander is a growing business, which is encouraging. If that's not enough on its own, there is also the rather notable levels of insider ownership. The combination definitely favoured by investors so consider keeping the company on a watchlist. It is worth noting though that we have found 1 warning sign for Banco Santander that you need to take into consideration.

Although Banco Santander certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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.