Thor Industries, Inc. (NYSE: THO) Shareholders could be worried after seeing the stock price drop 17% in the last quarter. On the positive side, the share price has risen over the past five years. Unfortunately, its 51% return is lower than the market return of 124%.
Check out our latest analysis for Thor Industries
To paraphrase Benjamin Graham: In the short term the market is a voting machine, but in the long term it is a weighing machine. An imperfect but reasonable way to gauge how sentiment is changing around a company is to compare earnings per share (EPS) with the stock price.
In five years, Thor Industries has managed to increase its earnings per share by 16% per year. This EPS growth is higher than the 9% average annual increase in the share price. So it looks like the market isn’t that keen on the stock these days. This cautious sentiment is reflected in its (fairly low) P / E ratio of 11.19.
The company’s earnings per share (over time) is shown in the image below (click to see exact numbers).
We know Thor Industries has improved its results lately, but will it increase its revenue? Check to see if analysts believe Thor Industries will increase revenue in the future.
What about dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So, for companies that pay a generous dividend, the TSR is often much higher than the return on the share price. In the case of Thor Industries, it has a TSR of 65% for the past 5 years. This exceeds its share price return that we mentioned earlier. The dividends paid by the company thus boosted the total shareholder return.
A different perspective
The shareholders of Thor Industries achieved a total return of 11% during the year. But this yield is lower than the market. The silver lining is that the gain was actually better than the average annual return of 11% per year over five years. This could indicate that the company is attracting new investors, while pursuing its strategy. It is always interesting to follow the evolution of stock prices over the long term. But to understand Thor Industries better, there are many other factors that we need to consider. For example, we discovered 4 warning signs for Thor Industries which you should know before investing here.
If you are like me then you do 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 the US stock exchanges.
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