Mesabi Trust (NYSE: MSB) Five-Year Earnings Growth Below 41% YoY Shareholder Return
The maximum you can lose on any stock (assuming you’re not using leverage) is 100% of your money. But on the bright side, if you buy shares of a high quality company at the right price, you can earn well over 100%. Long term Confidence Mesabi (NYSE: MSB) Shareholders would be well aware of this, since the stock has risen 256% in five years. Better yet, the stock price rose 15% last week.
After a strong gain last week, it’s worth seeing if long-term returns have been boosted by improving fundamentals.
Check out our latest analysis for Mesabi Trust
It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying performance of companies. An imperfect but simple way to consider how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.
In five years, Mesabi Trust has managed to increase its earnings per share by 48% per year. EPS growth is more impressive than the 29% annual share price gain over the same period. Therefore, it seems that the market has become relatively pessimistic about the company. This cautious sentiment is reflected in its (fairly low) P / E ratio of 8.91.
The company’s earnings per share (over time) is shown in the image below (click to see exact numbers).
Before buying or selling a stock, we always recommend a careful review of historical growth trends, available here.
What about dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. While the share price return reflects only the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital increase or spin- off updated. It’s fair to say that the TSR gives a more complete picture of dividend paying stocks. As it turns out, Mesabi Trust’s TSR over the past 5 years was 456%, which exceeds the share price return mentioned earlier. And there’s no price guessing that dividend payments are a big reason for the discrepancy!
A different perspective
It is nice to see that the shareholders of Mesabi Trust have received a total shareholder return of 57% over the past year. And that includes the dividend. This is better than the annualized return of 41% over half a decade, which implies that the company has been doing better recently. Since the stock price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It is always interesting to follow the evolution of stock prices over the long term. But to understand Mesabi Trust better, there are many other factors to consider. To this end, you should inquire about the 2 warning signs we spotted with Mesabi Trust (including 1 which does not suit us too much).
Sure, you might find a fantastic investment looking elsewhere. So take a look at this free list of companies that we believe will increase their profits.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on US stock exchanges.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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