With EPS Growth And More, Qatar Islamic Bank (Q.P.S.C.) (DSM:QIBK) Makes An Interesting Case

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 Qatar Islamic Bank (Q.P.S.C.) (DSM:QIBK). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

See our latest analysis for Qatar Islamic Bank (Q.P.S.C.)

How Quickly Is Qatar Islamic Bank (Q.P.S.C.) Increasing Earnings Per Share?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That makes EPS growth an attractive quality for any company. Qatar Islamic Bank (Q.P.S.C.) managed to grow EPS by 10% per year, over three years. That growth rate is fairly good, assuming the company can keep it up.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. It's noted that Qatar Islamic Bank (Q.P.S.C.)'s revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. EBIT margins for Qatar Islamic Bank (Q.P.S.C.) remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 10% to ر.ق7.3b. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

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 Qatar Islamic Bank (Q.P.S.C.)'s future profits.

Are Qatar Islamic Bank (Q.P.S.C.) Insiders Aligned With All Shareholders?

Since Qatar Islamic Bank (Q.P.S.C.) has a market capitalisation of ر.ق47b, 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. Notably, they have an enviable stake in the company, worth ر.ق5.9b. Coming in at 13% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. So there is opportunity here to invest in a company whose management have tangible incentives to deliver.

Does Qatar Islamic Bank (Q.P.S.C.) Deserve A Spot On Your Watchlist?

One positive for Qatar Islamic Bank (Q.P.S.C.) is that it is growing EPS. That's nice to see. 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. Of course, identifying quality businesses is only half the battle; investors need to know whether the stock is undervalued. So you might want to consider this free discounted cashflow valuation of Qatar Islamic Bank (Q.P.S.C.).

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

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.