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Some Salini Impregilo (BIT:SAL) Shareholders Are Down 26%

Simply Wall St

Salini Impregilo S.p.A. (BIT:SAL) shareholders should be happy to see the share price up 16% in the last quarter. But if you look at the last five years the returns have not been good. After all, the share price is down 26% in that time, significantly under-performing the market.

See our latest analysis for Salini Impregilo

Because Salini Impregilo is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over five years, Salini Impregilo grew its revenue at 3.8% per year. That's far from impressive given all the money it is losing. Given the weak growth, the share price fall of 5.9% isn't particularly surprising. The key question is whether the company can make it to profitability, and beyond, without trouble. It could be worth putting it on your watchlist and revisiting when it makes its maiden profit.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

BIT:SAL Income Statement, October 16th 2019

Take a more thorough look at Salini Impregilo's financial health with this free report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Salini Impregilo's TSR for the last 5 years was -21%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Salini Impregilo provided a TSR of 1.2% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 4.7% endured over half a decade. It could well be that the business is stabilizing. If you would like to research Salini Impregilo in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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