Seplat Petroleum Development (LON:SEPL) Shareholders Have Enjoyed A 66% Share Price Gain
One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. For example, the Seplat Petroleum Development Company Plc (LON:SEPL) share price is up 66% in the last three years, clearly besting the market return of around 6.4% (not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 4.1% , including dividends .
View our latest analysis for Seplat Petroleum Development
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...' 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 three years of share price growth, Seplat Petroleum Development moved from a loss to profitability. So we would expect a higher share price over the period.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It is of course excellent to see how Seplat Petroleum Development has grown profits over the years, but the future is more important for shareholders. This free interactive report on Seplat Petroleum Development's balance sheet strength is a great place to start, if you want to investigate the stock further.
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 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 Seplat Petroleum Development, it has a TSR of 85% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Seplat Petroleum Development shareholders are up 4.1% for the year (even including dividends) . But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 3.4% per year, over five years. So this might be a sign the business has turned its fortunes around. Before forming an opinion on Seplat Petroleum Development you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.
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 GB 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.
