The past five years for Rabigh Refining and Petrochemical (TADAWUL:2380) investors has not been profitable

Rabigh Refining and Petrochemical Company (TADAWUL:2380) shareholders should be happy to see the share price up 16% in the last month. But over the last half decade, the stock has not performed well. In fact, the share price is down 65%, which falls well short of the return you could get by buying an index fund.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

Check out our latest analysis for Rabigh Refining and Petrochemical

SWOT Analysis for Rabigh Refining and Petrochemical

Rabigh Refining and Petrochemical isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, Rabigh Refining and Petrochemical grew its revenue at 7.8% per year. That's a fairly respectable growth rate. The share price, meanwhile, has fallen 11% compounded, over five years. That suggests the market is disappointed with the current growth rate. That could lead to an opportunity if the company is going to become profitable sooner rather than later.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling Rabigh Refining and Petrochemical stock, you should check out this FREE detailed report on its balance sheet.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Rabigh Refining and Petrochemical's total shareholder return (TSR) and its share price change, which we've covered above. 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. Dividends have been really beneficial for Rabigh Refining and Petrochemical shareholders, and that cash payout explains why its total shareholder loss of 49%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

We regret to report that Rabigh Refining and Petrochemical shareholders are down 49% for the year. Unfortunately, that's worse than the broader market decline of 10.0%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Rabigh Refining and Petrochemical has 1 warning sign we think you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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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.