Stock Analysis

Dr. Sulaiman Al Habib Medical Services Group's (TADAWUL:4013) three-year earnings growth trails the 78% YoY shareholder returns

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Investing can be hard but the potential fo an individual stock to pay off big time inspires us. But when you hold the right stock for the right time period, the rewards can be truly huge. Take, for example, the Dr. Sulaiman Al Habib Medical Services Group Company (TADAWUL:4013) share price, which skyrocketed 435% over three years. It's also good to see the share price up 32% over the last quarter.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

Check out our latest analysis for Dr. Sulaiman Al Habib Medical Services Group

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.

Dr. Sulaiman Al Habib Medical Services Group was able to grow its EPS at 24% per year over three years, sending the share price higher. In comparison, the 75% per year gain in the share price outpaces the EPS growth. So it's fair to assume the market has a higher opinion of the business than it did three years ago. It's not unusual to see the market 're-rate' a stock, after a few years of growth. This optimism is also reflected in the fairly generous P/E ratio of 61.78.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

SASE:4013 Earnings Per Share Growth March 31st 2023

We know that Dr. Sulaiman Al Habib Medical Services Group has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Dr. Sulaiman Al Habib Medical Services Group's TSR for the last 3 years was 464%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

We're pleased to report that Dr. Sulaiman Al Habib Medical Services Group rewarded shareholders with a total shareholder return of 56% over the last year. And yes, that does include the dividend. But the three year TSR of 78% per year is even better. Before forming an opinion on Dr. Sulaiman Al Habib Medical Services Group you might want to consider these 3 valuation metrics.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

Valuation is complex, but we're helping make it simple.

Find out whether Dr. Sulaiman Al Habib Medical Services Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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