Did Business Growth Power PerkinElmer’s (NYSE:PKI) Share Price Gain of 117%?

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%. Long term PerkinElmer, Inc. (NYSE:PKI) shareholders would be well aware of this, since the stock is up 117% in five years. Also pleasing for shareholders was the 24% gain in the last three months. But this could be related to the strong market, which is up 15% in the last three months.

View our latest analysis for PerkinElmer

To quote Buffett, ‘Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace…’ 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, PerkinElmer managed to grow its earnings per share at 6.7% a year. This EPS growth is slower than the share price growth of 17% per year, over the same period. So it’s fair to assume the market has a higher opinion of the business than it did five years ago. That’s not necessarily surprising considering the five-year track record of earnings growth. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 45.43.

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

NYSE:PKI Past and Future Earnings, April 2nd 2019
NYSE:PKI Past and Future Earnings, April 2nd 2019

We know that PerkinElmer has improved its bottom line lately, but is it going to grow revenue? Check if analysts think PerkinElmer will grow revenue in the future.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of PerkinElmer, it has a TSR of 122% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It’s nice to see that PerkinElmer shareholders have received a total shareholder return of 32% over the last year. That’s including the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 17% 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 PerkinElmer it might be wise to click here to see if insiders have been buying or selling shares.

We will like PerkinElmer 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 US exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.