Swick Mining Services (ASX: SWK) shareholder returns have been remarkable, gaining 37% in 1 year


If you want to accumulate wealth in the stock market, you can do so by purchasing an index fund. But you can do better than that by choosing better-than-average stocks (as part of a diversified portfolio). Namely, the Swick Mining Services Limited The share price (ASX: SWK) is 31% higher than it was a year ago, much better than the market return of around 26% (excluding dividends) during the same period. This should therefore make shareholders smile. Long-term returns have not been so good, with the share price only 20% higher than it was three years ago.

Based on a strong 7-day performance, let’s check out what role company fundamentals have played in generating long-term returns for shareholders.

Check out our latest review for Swick Mining Services

While the markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just the underlying performance of the company. By comparing earnings per share (EPS) and changes in the share price over time, we can get a sense of how investors’ attitudes towards a company have changed over time.

Swick Mining Services has gone from loss to profit over the past year.

When a company is right on the brink of profitability, it may be useful to consider other metrics to more accurately assess growth (and therefore understand stock price movements).

For starters, we suspect that the share price was supported by the dividend, which was increased over the year. Income-seeking investors likely helped the share price rise. But it should be added that the revenue growth of 4.7% over one year would have painted a pretty picture.

Below you can see how earnings and income have evolved over time (find out the exact values ​​by clicking on the image).

ASX: SWK Profits and Revenue Growth September 16, 2021

You can see how his track record has strengthened (or weakened) over time in this free interactive graphics.

What about dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. TSR is a yield calculation that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of any discounted capital increase and spinoff. It’s fair to say that the TSR gives a more complete picture of dividend paying stocks. As it turns out, Swick Mining Services’ TSR for the past year was 37%, which exceeds the share price return mentioned above. The dividends paid by the company thus boosted the total shareholder return.

A different perspective

It is good to see that Swick Mining Services has rewarded its shareholders with a total shareholder return of 37% over the past twelve months. Of course, this includes the dividend. As the 1-year TSR is better than the 5-year TSR (the latter standing at 3% per year), it seems that the stock’s performance has improved in recent times. Someone with an optimistic outlook might view the recent improvement in TSR as indicating that the business itself is improving over time. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really get an overview, we have to take other information into account as well. For example, we have identified 3 warning signs for Swick Mining Services of which you should be aware.

If you are like me then you not want to miss it free list of growing companies that insiders buy.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on AU stock exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.
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