Does Seaboard's (NYSEMKT:SEB) Share Price Gain of 25% Match Its Business Performance?

By
Simply Wall St
Published
March 08, 2021
NYSEAM:SEB

If you buy and hold a stock for many years, you'd hope to be making a profit. Better yet, you'd like to see the share price move up more than the market average. Unfortunately for shareholders, while the Seaboard Corporation (NYSEMKT:SEB) share price is up 25% in the last five years, that's less than the market return. Looking at the last year alone, the stock is up 15%.

Check out our latest analysis for Seaboard

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During five years of share price growth, Seaboard achieved compound earnings per share (EPS) growth of 11% per year. This EPS growth is higher than the 5% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days.

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

earnings-per-share-growth
AMEX:SEB Earnings Per Share Growth March 9th 2021

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

Seaboard shareholders gained a total return of 15% during the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 5% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand Seaboard better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Seaboard you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.

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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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