Quanta Services, Inc. (NYSE:PWR) has experienced a slight decline of 11% in its share price this week, which has caused some concern among shareholders. However, when we look at the bigger picture, it becomes evident that Quanta Services has shown remarkable performance over the past five years.
Despite the recent dip, the stock price has soared by an impressive 435% since five years ago, which is undeniably an outstanding achievement. This demonstrates the company’s resilience and ability to deliver consistent growth over the long term.
As Benjamin Graham once said, “In the short term, the market is a voting machine, but in the long term, it is a weighing machine.” This quote reminds us that market sentiment can fluctuate in the short term, but it is the company’s fundamental performance that truly matters.
When examining Quanta Services’ earnings per share (EPS) growth over the past five years, we can see that it has increased at an average annual rate of 15%, while the share price has grown by an average of 40% per year. This suggests that the market has a higher appreciation for the company now compared to five years ago, given its consistent track record of growth.
It is also important to assess Quanta Services’ ability to grow its revenue. Although the company has shown improvement in its bottom line, the question remains whether it can sustainably increase its revenue. Analysts’ insights on this matter can provide valuable information for investors.
When considering investment returns, it is crucial to differentiate between share price return and total shareholder return (TSR). While share price return only accounts for changes in the share price, TSR includes dividends and other benefits from capital raising or spin-offs. In the case of Quanta Services, its TSR over the last five years is an impressive 444%, surpassing the previously mentioned share price return. This can be attributed to the company’s consistent dividend payments, which enhance overall shareholder value.
Taking a different perspective, Quanta Services has not only generated a total shareholder return of 27% in the past twelve months but has also achieved a remarkable TSR of 40% per year over the last five years. This indicates that the company may still have significant growth potential, making it an attractive opportunity for prospective buyers.
While market conditions can influence the share price, other factors play a more substantial role. It is worth noting that our investment analysis has identified 2 warning signs for Quanta Services, which potential investors should consider.
If Quanta Services doesn’t align with your investment goals, don’t despair. There are plenty of other companies with promising earnings growth potential. For a curated list of such companies, check out our free list.
Please be advised that the market returns mentioned in this article reflect the average returns of stocks traded on American exchanges.
Frequently Asked Questions (FAQ)
1. Can Quanta Services continue its growth in the long term?
While past performance is not indicative of future results, Quanta Services has displayed a consistent track record of growth. However, investors should carefully consider all factors and conduct thorough research before making investment decisions.
2. How does Quanta Services’ total shareholder return compare to its share price return?
Quanta Services’ total shareholder return (TSR) includes dividends and other benefits, resulting in a more comprehensive measure of investment returns. The company’s TSR of 444% over the last five years surpassed its share price return.
3. What warning signs have been identified for Quanta Services?
Our investment analysis has highlighted 2 warning signs for Quanta Services. It is essential for investors to take these factors into account when evaluating the company’s potential.
4. Where can I find more companies with promising earnings growth potential?
For a curated list of companies with promising earnings growth potential, feel free to explore our comprehensive list of recommendations.
Please note that this article by Simply Wall St provides general information based on historical data and analyst forecasts. It does not constitute financial advice and should not be relied upon for making investment decisions. Your objectives and financial situation should be carefully considered before investing.