U.S. markets open in 8 hours 43 minutes
  • S&P Futures

    3,835.75
    +26.50 (+0.70%)
     
  • Dow Futures

    31,090.00
    +178.00 (+0.58%)
     
  • Nasdaq Futures

    13,045.50
    +134.50 (+1.04%)
     
  • Russell 2000 Futures

    2,230.30
    +31.10 (+1.41%)
     
  • Crude Oil

    62.45
    +0.95 (+1.54%)
     
  • Gold

    1,747.00
    +18.20 (+1.05%)
     
  • Silver

    26.90
    +0.46 (+1.74%)
     
  • EUR/USD

    1.2086
    -0.0001 (-0.01%)
     
  • 10-Yr Bond

    1.4600
    0.0000 (0.00%)
     
  • Vix

    27.95
    -28.89 (-100.00%)
     
  • GBP/USD

    1.3984
    +0.0062 (+0.44%)
     
  • USD/JPY

    106.5370
    +0.0350 (+0.03%)
     
  • BTC-USD

    46,241.79
    +1,225.95 (+2.72%)
     
  • CMC Crypto 200

    924.44
    -8.70 (-0.93%)
     
  • FTSE 100

    6,483.43
    -168.53 (-2.53%)
     
  • Nikkei 225

    29,583.02
    +617.01 (+2.13%)
     

Integral Diagnostics (ASX:IDX) Has Gifted Shareholders With A Fantastic 292% Total Return On Their Investment

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of Integral Diagnostics Limited (ASX:IDX) stock is up an impressive 232% over the last five years. And in the last month, the share price has gained -1.1%.

See our latest analysis for Integral Diagnostics

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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, Integral Diagnostics managed to grow its earnings per share at 27% a year. That makes the EPS growth particularly close to the yearly share price growth of 27%. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. In fact, the share price seems to largely reflect the EPS growth.

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

earnings-per-share-growth
earnings-per-share-growth

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

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Integral Diagnostics, it has a TSR of 292% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We're pleased to report that Integral Diagnostics shareholders have received a total shareholder return of 17% over one year. Of course, that includes the dividend. However, that falls short of the 31% TSR per annum it has made for shareholders, each year, over five years. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Integral Diagnostics is showing 2 warning signs in our investment analysis , you should know about...

Of course Integral Diagnostics may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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.