Malath Cooperative Insurance (TADAWUL:8020) shareholder returns have been decent, earning 84% in 5 years

When we invest, we're generally looking for stocks that outperform the market average. And the truth is, you can make significant gains if you buy good quality businesses at the right price. To wit, the Malath Cooperative Insurance share price has climbed 84% in five years, easily topping the market return of 27% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 64% in the last year.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Check out our latest analysis for Malath Cooperative Insurance

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last half decade, Malath Cooperative Insurance became profitable. That would generally be considered a positive, so we'd expect the share price to be up. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. In fact, the Malath Cooperative Insurance stock price is 10% lower in the last three years. During the same period, EPS grew by 70% each year. It would appear there's a real mismatch between the increasing EPS and the share price, which has declined -4% a year for three years.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It is of course excellent to see how Malath Cooperative Insurance has grown profits over the years, but the future is more important for shareholders. This free interactive report on Malath Cooperative Insurance's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Malath Cooperative Insurance shareholders have received a total shareholder return of 64% over the last year. That's better than the annualised return of 13% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before deciding if you like the current share price, check how Malath Cooperative Insurance scores on these 3 valuation metrics.

We will like Malath Cooperative Insurance better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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.