Introducing Games Workshop Group (LON:GAW), The Stock That Soared 735% In The Last Five Years

Buying shares in the best businesses can build meaningful wealth for you and your family. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held Games Workshop Group PLC (LON:GAW) shares for the last five years, while they gained 735%. If that doesn't get you thinking about long term investing, we don't know what will. We note the stock price is up 2.1% in the last seven days.

It really delights us to see such great share price performance for investors.

Check out our latest analysis for Games Workshop Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

During five years of share price growth, Games Workshop Group achieved compound earnings per share (EPS) growth of 52% per year. That makes the EPS growth particularly close to the yearly share price growth of 53%. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Indeed, it would appear the share price is reacting to the EPS.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It is of course excellent to see how Games Workshop Group has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Games Workshop Group stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Games Workshop Group's TSR for the last 5 years was 1066%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's good to see that Games Workshop Group has rewarded shareholders with a total shareholder return of 46% in the last twelve months. And that does include the dividend. Having said that, the five-year TSR of 63% a year, is even better. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

But note: Games Workshop Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.