Here's Why We Think Broadstone Net Lease (NYSE:BNL) Might Deserve Your Attention Today

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Broadstone Net Lease (NYSE:BNL). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

Check out our latest analysis for Broadstone Net Lease

Broadstone Net Lease's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. It certainly is nice to see that Broadstone Net Lease has managed to grow EPS by 20% per year over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away satisfied.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. EBIT margins for Broadstone Net Lease remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 16% to US$450m. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Broadstone Net Lease's future profits.

Are Broadstone Net Lease Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

While Broadstone Net Lease insiders did net US$150k selling stock over the last year, they invested US$453k, a much higher figure. An optimistic sign for those with Broadstone Net Lease in their watchlist. We also note that it was the Independent Director, Michael Coke, who made the biggest single acquisition, paying US$179k for shares at about US$17.92 each.

On top of the insider buying, it's good to see that Broadstone Net Lease insiders have a valuable investment in the business. Indeed, they hold US$26m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 0.8% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

Shareholders have more to smile about than just insiders adding more shares to their already sizeable holdings. That's because on our analysis the CEO, John Moragne, is paid less than the median for similar sized companies. The median total compensation for CEOs of companies similar in size to Broadstone Net Lease, with market caps between US$2.0b and US$6.4b, is around US$6.4m.

Broadstone Net Lease's CEO took home a total compensation package of US$2.2m in the year prior to December 2022. First impressions seem to indicate a compensation policy that is favourable to shareholders. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. Generally, arguments can be made that reasonable pay levels attest to good decision-making.

Should You Add Broadstone Net Lease To Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Broadstone Net Lease's strong EPS growth. Furthermore, company insiders have been adding to their significant stake in the company. These things considered, this is one stock worth watching. What about risks? Every company has them, and we've spotted 5 warning signs for Broadstone Net Lease (of which 2 shouldn't be ignored!) you should know about.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Broadstone Net Lease, you'll probably love this free list of growing companies that insiders are buying.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.