Etihad Etisalat (TADAWUL:7020) Shareholders Have Enjoyed A 97% Share Price Gain

One simple way to benefit from the stock market is to buy an index fund. But if you pick the right individual stocks, you could make more than that. For example, the Etihad Etisalat Company (TADAWUL:7020) share price is up 97% in the last three years, clearly besting the market return of around 19% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 18% in the last year.

View our latest analysis for Etihad Etisalat

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 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.

During three years of share price growth, Etihad Etisalat moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.

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

We know that Etihad Etisalat has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Etihad Etisalat's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Etihad Etisalat has rewarded shareholders with a total shareholder return of 18% in the last twelve months. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Etihad Etisalat better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Etihad Etisalat , and understanding them should be part of your investment process.

We will like Etihad Etisalat 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 SA exchanges.

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This article by Simply Wall St is general in nature. 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.
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