Stock Analysis

As Qatar Insurance Company Q.S.P.C (DSM:QATI) rises 6.1% this past week, investors may now be noticing the company's five-year earnings growth

DSM:QATI
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Ideally, your overall portfolio should beat the market average. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in Qatar Insurance Company Q.S.P.C. (DSM:QATI), since the last five years saw the share price fall 30%. But it's up 6.1% in the last week.

The recent uptick of 6.1% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Qatar Insurance Company Q.S.P.C

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During five years of share price growth, Qatar Insurance Company Q.S.P.C moved from a loss to profitability. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics might give us a better handle on how its value is changing over time.

The most recent dividend was actually lower than it was in the past, so that may have sent the share price lower. The revenue decline of about 10% per year might also encourage sellers.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
DSM:QATI Earnings and Revenue Growth December 18th 2024

We know that Qatar Insurance Company Q.S.P.C has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Qatar Insurance Company Q.S.P.C will earn in the future (free profit forecasts).

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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Qatar Insurance Company Q.S.P.C the TSR over the last 5 years was -20%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Qatar Insurance Company Q.S.P.C shareholders are down 1.3% for the year (even including dividends), but the market itself is up 15%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. However, the loss over the last year isn't as bad as the 4% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. It's always interesting to track share price performance over the longer term. But to understand Qatar Insurance Company Q.S.P.C better, we need to consider many other factors. Take risks, for example - Qatar Insurance Company Q.S.P.C has 3 warning signs (and 2 which are a bit unpleasant) we think you should know about.

Of course Qatar Insurance Company Q.S.P.C may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

Valuation is complex, but we're here to simplify it.

Discover if Qatar Insurance Company Q.S.P.C might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

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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.