The main point of investing for the long term is to make money. But more than that, you probably want to see it rise more than the market average. Unfortunately for shareholders, while the Sociedad Química y Minera de Chile S.A. (NYSE:SQM) share price is up 61% in the last five years, that's less than the market return. The last year has been disappointing, with the stock price down 31% in that time.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.
During five years of share price growth, Sociedad Química y Minera de Chile achieved compound earnings per share (EPS) growth of 33% per year. The EPS growth is more impressive than the yearly share price gain of 10% over the same period. Therefore, it seems the market has become relatively pessimistic about the company. This cautious sentiment is reflected in its (fairly low) P/E ratio of 6.94.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Sociedad Química y Minera de Chile has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Sociedad Química y Minera de Chile'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. 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. As it happens, Sociedad Química y Minera de Chile's TSR for the last 5 years was 92%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
Sociedad Química y Minera de Chile shareholders are down 30% for the year (even including dividends), but the market itself is up 28%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 14% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Sociedad Química y Minera de Chile (at least 1 which can't be ignored) , and understanding them should be part of your investment process.
Of course Sociedad Química y Minera de Chile 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 American exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
長期投資の主な目的は収益を上げることです。しかし、市場平均よりも上昇することを望むと思います。残念ながら、株主にとってSociedad Quimica y Minera de Chile S.A.(NYSE:SQM)の株価は過去5年間で61%上昇していますが、市場のリターンよりも低いです。昨年は失望する結果となり、株価はその期間に31%下がっています。
5年間の株価上昇において、チリSociedad Quimica y Mineraは、年間33%の複利でEPS成長を達成しました。EPS成長は同じ期間に10%の株価上昇よりも印象的です。そのため、市場は比較的悲観的になっていると考えられます。この慎重な感情は、かなり低いP/E比6.94に反映されています。
株式の収益率だけでなく、株価収益率も考慮することが重要です。株価の変動のみを反映する株価収益率に対して、TSRには配当の価値(再投資した場合)、割引資本調達やスピンオフの利益が含まれます。株の収益をより包括的に示すTSRがより妥当だと言えます。実際、チリSociedad Quimica y Mineraの5年間のTSRは92%で、上述の株価収益率を上回っています。これは主に配当支払いの結果です!
Sociedad Quimica y Minera de Chileの株主は1年間で30%の下落です(配当金を含めて)、しかし市場全体は28%上昇しています。ただし、最高の株式であっても、12か月間は市場にアンダーパフォームすることがあります。一方、長期の株主は5年間で年14%の利益を得ています。本質的なデータが長期的に持続可能な成長を示しつづける場合、現在の売りオフは検討に値する機会になる可能性があります。株価に影響を与える市況の異なる影響を検討することは十分に価値がありますが、投資リスクの常在するものを考慮してください。我々はSociedad Quimica y Minera de Chileの2つの警告サインを確認しました(少なくとも1つは無視できない)ので、それらを理解することは投資プロセスの一部となります。
もちろん、Sociedad Quimica y Minera de Chileは最適な株式ではないかもしれません。成長株の無料コレクションをご覧ください。