Yahoo Finance If You Had Bought Boeing (NYSE:BA) Stock Five Years Ago, You Could Pocket A 86% Gain Today
If you buy and hold a stock for many years, you'd hope to be making a profit. But more than that, you probably want to see it rise more than the market average. Unfortunately for shareholders, while the The Boeing Company (NYSE:BA) share price is up 86% in the last five years, that's less than the market return. However, more recent buyers should be happy with the increase of 24% over the last year.
View our latest analysis for Boeing
Boeing wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 5 years Boeing saw its revenue shrink by 8.7% per year. The falling revenue is arguably somewhat reflected in the lacklustre return of 13% per year over that time. That's pretty decent given the top line decline, and lack of profits. We'd keep an eye on changes in the trend - there may be an opportunity if the company returns to growth.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. You can see what analysts are predicting for Boeing in this interactive graph of future profit estimates.
What about the Total Shareholder Return (TSR)?
We've already covered Boeing's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Boeing's TSR of 104% for the 5 years exceeded its share price return, because it has paid dividends.
A Different Perspective
Boeing shareholders are up 24% for the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 15% over half a decade This suggests the company might be improving over time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Boeing (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.
Boeing is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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. 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.
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