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- NYSE:CW
Investing in Curtiss-Wright (NYSE:CW) five years ago would have delivered you a 47% gain
The main point of investing for the long term is to make money. But more than that, you probably want to see it rise more than the market average. But Curtiss-Wright Corporation (NYSE:CW) has fallen short of that second goal, with a share price rise of 43% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 26% over the last year.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for Curtiss-Wright
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.
Over half a decade, Curtiss-Wright managed to grow its earnings per share at 6.8% a year. So the EPS growth rate is rather close to the annualized share price gain of 7% per year. This indicates that investor sentiment towards the company has not changed a great deal. In fact, the share price seems to largely reflect the EPS growth.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Curtiss-Wright's earnings, revenue and cash flow.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Curtiss-Wright's TSR for the last 5 years was 47%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
We're pleased to report that Curtiss-Wright shareholders have received a total shareholder return of 26% over one year. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 8% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Curtiss-Wright has 1 warning sign we think you should be aware of.
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 US exchanges.
What are the risks and opportunities for Curtiss-Wright?
Curtiss-Wright Corporation, together with its subsidiaries, provides engineered products, solutions, and services to the aerospace, defense, general industrial, and power generation markets worldwide.
Rewards
Trading at 17% below our estimate of its fair value
Earnings are forecast to grow 7.14% per year
Earnings grew by 10.2% over the past year
Risks
Significant insider selling over the past 3 months
Has a high level of debt
Further research on
Curtiss-Wright
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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.
About NYSE:CW
Curtiss-Wright
Curtiss-Wright Corporation, together with its subsidiaries, provides engineered products, solutions, and services to the aerospace, defense, general industrial, and power generation markets worldwide.
Solid track record with adequate balance sheet.
