The total return for CBIZ (NYSE:CBZ) investors has risen faster than earnings growth over the last five years

By
Simply Wall St
Published
January 26, 2022
NYSE:CBZ
Source: Shutterstock

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For example, the CBIZ, Inc. (NYSE:CBZ) share price has soared 194% in the last half decade. Most would be very happy with that. On the other hand, the stock price has retraced 5.3% in the last week. But this could be related to the soft market, with stocks selling off around 5.1% in the last week.

Although CBIZ has shed US$111m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for CBIZ

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, CBIZ achieved compound earnings per share (EPS) growth of 15% per year. This EPS growth is lower than the 24% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.

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

earnings-per-share-growth
NYSE:CBZ Earnings Per Share Growth January 26th 2022

It might be well worthwhile taking a look at our free report on CBIZ's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that CBIZ shareholders have received a total shareholder return of 42% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 24% 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. Before spending more time on CBIZ it might be wise to click here to see if insiders have been buying or selling shares.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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