We Ran A Stock Scan For Earnings Growth And Yamama Saudi Cement (TADAWUL:3020) Passed With Ease

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Yamama Saudi Cement (TADAWUL:3020). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Yamama Saudi Cement with the means to add long-term value to shareholders.

See our latest analysis for Yamama Saudi Cement

How Fast Is Yamama Saudi Cement Growing Its Earnings Per Share?

Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So it's no surprise that some investors are more inclined to invest in profitable businesses. In impressive fashion, Yamama Saudi Cement's EPS grew from ر.س1.00 to ر.س1.90, over the previous 12 months. Year on year growth of 90% is certainly a sight to behold.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. The music to the ears of Yamama Saudi Cement shareholders is that EBIT margins have grown from 21% to 32% in the last 12 months and revenues are on an upwards trend as well. Ticking those two boxes is a good sign of growth, in our book.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Yamama Saudi Cement.

Are Yamama Saudi Cement Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Yamama Saudi Cement followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. We note that their impressive stake in the company is worth ر.س801m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Is Yamama Saudi Cement Worth Keeping An Eye On?

Yamama Saudi Cement's earnings per share have been soaring, with growth rates sky high. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So based on this quick analysis, we do think it's worth considering Yamama Saudi Cement for a spot on your watchlist. However, before you get too excited we've discovered 1 warning sign for Yamama Saudi Cement that you should be aware of.

Although Yamama Saudi Cement certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of Saudi companies that not only boast of strong growth but have also seen recent insider buying..

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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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.