Stock Analysis

Meshulam Levinstein Contracting & Engineering's (TLV:LEVI) five-year earnings growth trails the solid shareholder returns

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It might be of some concern to shareholders to see the Meshulam Levinstein Contracting & Engineering Ltd. (TLV:LEVI) share price down 13% in the last month. But that doesn't change the fact that the returns over the last five years have been very strong. Indeed, the share price is up an impressive 241% in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. Of course, that doesn't necessarily mean it's cheap now.

The past week has proven to be lucrative for Meshulam Levinstein Contracting & Engineering investors, so let's see if fundamentals drove the company's five-year performance.

View our latest analysis for Meshulam Levinstein Contracting & Engineering

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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, Meshulam Levinstein Contracting & Engineering achieved compound earnings per share (EPS) growth of 50% per year. The EPS growth is more impressive than the yearly share price gain of 28% over the same period. So it seems the market isn't so enthusiastic about the stock these days.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

TASE:LEVI Earnings Per Share Growth March 21st 2022

Dive deeper into Meshulam Levinstein Contracting & Engineering's key metrics by checking this interactive graph of Meshulam Levinstein Contracting & Engineering's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Meshulam Levinstein Contracting & Engineering the TSR over the last 5 years was 290%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's good to see that Meshulam Levinstein Contracting & Engineering has rewarded shareholders with a total shareholder return of 78% in the last twelve months. And that does include the dividend. That gain is better than the annual TSR over five years, which is 31%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Meshulam Levinstein Contracting & Engineering better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Meshulam Levinstein Contracting & Engineering .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IL exchanges.

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