Dr. Sulaiman Al Habib Medical Services Group (TADAWUL:4013) shareholders have earned a 46% return over the last year

Simply Wall St
January 11, 2022
Source: Shutterstock

Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Dr. Sulaiman Al Habib Medical Services Group Company (TADAWUL:4013) share price is 44% higher than it was a year ago, much better than the market return of around 8.3% (not including dividends) in the same period. That's a solid performance by our standards! We'll need to follow Dr. Sulaiman Al Habib Medical Services Group for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

Check out our latest analysis for Dr. Sulaiman Al Habib Medical Services 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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year Dr. Sulaiman Al Habib Medical Services Group grew its earnings per share (EPS) by 30%. This EPS growth is significantly lower than the 44% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it a year ago.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

SASE:4013 Earnings Per Share Growth January 11th 2022

We know that Dr. Sulaiman Al Habib Medical Services Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Dr. Sulaiman Al Habib Medical Services Group will grow revenue in the future.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Dr. Sulaiman Al Habib Medical Services Group's TSR for the last 1 year was 46%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that Dr. Sulaiman Al Habib Medical Services Group shareholders have gained 46% over the last year, including dividends. We regret to report that the share price is down 2.9% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. Before forming an opinion on Dr. Sulaiman Al Habib Medical Services Group you might want to consider these 3 valuation metrics.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.