U.S. Markets closed

  • S&P 500

    4,109.31
    +58.48 (+1.44%)
     

  • Dow 30

    33,274.15
    +415.12 (+1.26%)
     

  • Nasdaq

    12,221.91
    +208.43 (+1.74%)
     

  • Russell 2000

    1,802.48
    +34.10 (+1.93%)
     

  • Crude Oil

    75.70
    +1.33 (+1.79%)
     

  • Gold

    1,987.00
    -10.70 (-0.54%)
     

  • Silver

    24.24
    +0.25 (+1.03%)
     

  • EUR/USD

    1.0847
    -0.0062 (-0.5640%)
     

  • 10-Yr Bond

    3.4940
    -0.0570 (-1.61%)
     

  • Vix

    18.70
    -0.32 (-1.68%)
     

  • GBP/USD

    1.2332
    -0.0058 (-0.4686%)
     

  • USD/JPY

    132.7970
    +0.1080 (+0.0814%)
     

  • BTC-USD

    28,435.67
    +602.89 (+2.17%)
     

  • CMC Crypto 200

    621.79
    +7.58 (+1.23%)
     

  • FTSE 100

    7,631.74
    +11.31 (+0.15%)
     

  • Nikkei 225

    28,041.48
    +258.55 (+0.93%)
     

Did You Participate In Any Of Main Street Capital's (NYSE:MAIN) Respectable 80% Return?

Simply Wall St
·4 min read

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. But more than that, you probably want to see it rise more than the market average. Unfortunately for shareholders, while the Main Street Capital Corporation (NYSE:MAIN) share price is up 24% in the last five years, that's less than the market return. Unfortunately the share price is down 0.7% in the last year.

See our latest analysis for Main Street Capital

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. 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, Main Street Capital actually saw its EPS drop 27% per year.

Since the EPS are down strongly, it seems highly unlikely market participants are looking at EPS to value the company. Given that EPS is down, but the share price is up, it seems clear the market is focussed on other aspects of the business, at the moment.

We note that the dividend has not increased, so that doesn't seem to explain the increase, either. It could be that the revenue growth of 7.5% per year is viewed as evidence that Main Street Capital is growing. In that case, the company may be sacrificing current earnings per share to drive growth.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think Main Street Capital will earn in the future (free profit forecasts).

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Main Street Capital the TSR over the last 5 years was 80%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Main Street Capital shareholders are up 7.8% for the year (even including dividends). Unfortunately this falls short of the market return. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 13% over five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. It's always interesting to track share price performance over the longer term. But to understand Main Street Capital better, we need to consider many other factors. Even so, be aware that Main Street Capital is showing 5 warning signs in our investment analysis , and 2 of those are potentially serious...

Main Street Capital is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.

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.

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

Recommended Stories

  • Schwab Hit by Worst Month Since 1987 Amid Cash Sorting Woes

    (Bloomberg) -- Charles Schwab Corp.’s worst month in more than 35 years has sparked a debate among analysts as to whether the brokerage giant has been unfairly punished by investors amid growing fears about the US banking sector.Most Read from BloombergParents Are Paying Consultants $750,000 to Get Kids Into Ivy League SchoolsTrump Faces Fingerprints, Mug Shot After Dramatic IndictmentSchwab Hit by Worst Month Since 1987 Amid Cash Sorting WoesChina Hits Micron With Review of Chips, Citing Securi

  • One of the world’s richest men knows why Silicon Valley Bank really failed: ‘People on iPhones’

    Stephen Schwartzman, worth $42 billion and at the head of a firm managing almost $1 trillion, says social media is what doomed the bank.

  • Procrastinators, Rejoice: The 6.89% I bonds Will Beat the Old 9.62% Bonds in Just 4 Years

    With a yield of 9.62%, the recently expired Series I bond was understandably popular. With interest rates rising, bond funds are down this year and banks continue to offer miserly rates on deposit accounts. So it's no wonder that a … Continue reading → The post It Pays to Procrastinate: The New 6.89% I bonds Will Beat the Old 9.62% Bonds in Just 4 Years appeared first on SmartAsset Blog.

  • Nomura Says US Money Supply Plunge Is ‘Elephant in the Room’ for Markets

    (Bloomberg) -- A Nomura Holdings Inc. strategist is warning that investors are overlooking a crucial clue as they grapple with the path of US inflation and the Federal Reserve’s response. Most Read from BloombergTrump Faces Fingerprints, Mug Shot After Dramatic IndictmentWorld’s Top-Rated Airport Sees Immigration System RestoredHow King Charles Got Thrown Into Disney’s Fight With Florida Governor DeSantisTrump to Be Arraigned Next Week After Historic IndictmentStocks Rally as Traders Eye Peak Ra

  • Dow Jones Rises 150 Points After Cool Inflation Data; 6 Stocks To Buy And Watch

    The Dow Jones rose Friday after key inflation data, with the release of the PCE price index, the Fed's preferred measure of inflation.

  • A $200,000 Annuity Will Pay Out This Much a Month

    An annuity can be an appealing option to build your retirement nest egg. Adding guaranteed retirement income to your retirement can give you financial stability. But the exact amount that you'll get from an annuity each month will vary. Let's … Continue reading → The post How Much Does a $200,000 Annuity Pay Per Month? appeared first on SmartAsset Blog.

  • Virgin Orbit’s sudden collapse is the latest in a series of high-risk failures by Richard Branson

    The satellite deployment startup founded by Branson is letting go of the bulk of its staff, citing an “inability to secure meaningful funding.”

  • Baby Boomers, You Need This Much Money to Retire Comfortably

    The Baby Boomer generation is reaching retirement age in record numbers. With more Boomers retiring on a daily basis, it helps to understand how prepared they are to leave their jobs for good. In this article, we’ll discuss the average … Continue reading → The post Average Retirement Savings for Baby Boomers appeared first on SmartAsset Blog.

  • Japan's Toyota hands St Petersburg plant over to Russian state

    MOSCOW (Reuters) -Russia and Toyota said on Friday that the Japanese carmaker's factory in St Petersburg had been handed over to state entity NAMI, with Moscow snapping up more assets from global automakers leaving Russia over the conflict in Ukraine. "Toyota's production site in St Petersburg has... been transferred to the state," Russia's Ministry of Industry and Trade said in a statement. The company said in September it had decided to stop vehicle production in Russia due to the interruption in supplies of key materials and parts.

  • How to make $100,000 or more and pay no income taxes

    Here’s how to earn a six-figure income and pay no income taxes on it – totally legally.

  • Three Stocks Turn $10,000 To $25,265 In Just 3 Months

    Investors enjoyed a small S&P 500 rally in March. But there were much more lucrative places to put money in the month.

  • US Power Plant Firm Goes Bankrupt After Winter Storm Penalties

    (Bloomberg) -- Lincoln Power LLC, the owner of two Illinois power plants, filed for bankruptcy after its financial strain was exacerbated by nearly $39 million in penalties levied by the biggest US electric-grid operator. Most Read from BloombergParents Are Paying Consultants $750,000 to Get Kids Into Ivy League SchoolsTrump Faces Fingerprints, Mug Shot After Dramatic IndictmentSchwab Hit by Worst Month Since 1987 Amid Cash Sorting WoesChina Hits Micron With Review of Chips, Citing Security Risk

  • Altria Lays Out a Transition to Smokeless Products. But It Begins With the Dividend.

    The biggest cigarette company in the U.S. acknowledges that it has to move toward smokeless products. But to hold its shareholder base, it also knows it has to grow an already rich dividend.

  • Warren Buffett and Morgan Stanley Have One Thing in Common: They Both Like These 2 Stocks

    Investors looking for alpha in an uncertain market environment could do worse than following in the footsteps of legendary stock pickers and probably none can match Warren Buffet’s reputation. Not for nothing the “Oracle of Omaha” is considered one of the all-time greats and for nearly 60 years, between 1965 and 2022, his Berkshire Hathaway firm’s returns have doubled those of the S&P 500. So, it’s definitely worth nosing through Buffett’s portfolio to see which stocks he currently holds. And wh

  • China Hits Micron With Review of Chips, Citing Security Risks

    (Bloomberg) -- Beijing opened a new front in the escalating semiconductor battle between the the US and China, launching a cybersecurity review of imports from America’s largest memory-chip maker, Micron Technology Inc. Most Read from BloombergParents Are Paying Consultants $750,000 to Get Kids Into Ivy League SchoolsTrump Faces Fingerprints, Mug Shot After Dramatic IndictmentSchwab Hit by Worst Month Since 1987 Amid Cash Sorting WoesChina Hits Micron With Review of Chips, Citing Security RisksU

  • Republic First Is ‘NOT’ First Republic, But Try Telling Traders That

    (Bloomberg) -- A case of mistaken identity is sparking a selloff in Republic First Bancorp Inc., which had fallen by more than 40% this month because investors have it confused with embattled First Republic Bank.Most Read from BloombergParents Are Paying Consultants $750,000 to Get Kids Into Ivy League SchoolsTrump Faces Fingerprints, Mug Shot After Dramatic IndictmentSchwab Hit by Worst Month Since 1987 Amid Cash Sorting WoesChina Hits Micron With Review of Chips, Citing Security RisksUS Stocks

  • Can I Retire Off The Interest I Made Investing $2 Million?

    For older Americans, living off the interest and returns of your retirement account is how retirement is structured. The goal is that by the time you hit your late 60s you will ideally have enough saved up to coast indefinitely. … Continue reading → The post How Much Interest Does $2 Million Pay Monthly? appeared first on SmartAsset Blog.

  • GE Stock Breaks Out To New High After Soaring More Than 45% — Is It A Buy?

    General Electric will emerge as an aviation and defense pure play in early 2024 after completing its big breakup. Is GE stock a buy as it breaks out to multiyear highs? GE News The company remains on track to spin off its energy business, as GE Vernova, in early 2024.

  • As Nvidia Stock Firms Up, Option Trade Could Return Nearly $300

    With positive flow in both stocks in the technology sector and options making more bullish bets, it's the ideal time to take a look at Nvidia.

  • ‘Everyone is kind of tired and has given up’ on COVID. But this new variant is ‘one to watch,’ the WHO says

    Here’s what we know so far about the latest variant to raise eyebrows—and the first to do so in several months.