If we assume
earnings grow at 5 % per year and the PE ratio stays constant (ie.
Even if
the earnings grow at a 5 % CAGR you will still make your returns.
If
earnings grow at a 2 % real rate, we can expect about 4.0 % to 4.5 % from stocks.
In brief, in the first phase of the model,
earnings grow at a rapid rate, and dividends are paid at a relatively low rate, in the second (transition) phase, the earnings growth and dividend payout rates grade linearly into the rates of the ultimate phase.
Earnings grow at a 4.87 % annualized rate, very similar to the rate of price increase, but over 130 years, it results in a rise in the P / E of 45 % in terms of the trend.
If
its earnings grow at 12 % pa, in ten years it will be earning almost $ 28.
«Some may say that
earnings growing at 25 % a year justify a 40 P / E, but its extremely difficult for a company to maintain that kind of growth, even for a short period of time, and no company can do it over a long period» Ralph Wanger
Jiayuan is growing quickly, with Q2 revenue more than doubling from a year earlier to $ 12.9 M and
earnings growing at a similar pace.
Despite the solid returns, the median price - to - earnings ratio (P / E) for Canadian dividend payers didn't change much, which implies that
earnings grew at a similar rate.
PEG at Work Say the TSJ Sports Conglomerate, a fictional company, is trading at 19 times earnings (P / E = 19) and has
earnings growing at 30 %.
Earnings grows at 8 - 12 % / year.
Not exact matches
Following Apple's previous
earnings report in February, Chief Financial Officer Luca Maestri gave rare additional guidance, telling analysts on a conference call that iPhone revenue would
grow by
at least 10 % year - over-year in the current quarter.
Currently, the company is trading
at about 25 times
earnings and with a long - term
earnings per share growth rate of about 15 %, its price - to -
earnings to growth ratio — a metric used to value fast
growing companies — is about 1.4.
It is slightly more expensive on a price - to -
earnings basis than the rest of the banks — it's trading
at about 16 times
earnings — but that's because it's
growing faster.
Including inflation,
earnings should
grow at 3.5 % (1.5 % real growth plus 2 % inflation).
He expects the sector's
earnings to
grow by about 13.5 % a year over the next five years, with industrial and technology companies expanding
at a faster rate.
Even after Alphabet's more than $ 100 billion market gain this year alone, the company trades
at just 23 times expected 2017
earnings, compared with about 18.5 times for the S&P 500, and is
growing much faster.
Shares of the company are flat for the year after its most recent
earnings report failed to beat Wall Street estimates for the first time in two years, but Marshall said that he expects its revenue to continue to
grow at above - market rates.
This discount (cash adjusted) becomes even more compelling given our confidence that Apple will
grow earnings per share
at a rate well in excess of the S&P 500 for the foreseeable future.
If you're looking
at price - to -
earnings, companies that trade
at 10 times or less and can
grow earnings by
at least 10 % are attractive, says Nield.
The group's Salary Forecast, which looks
at real wages (i.e average increases in
earnings adjusted for inflation), predicts that American employees will see their incomes
grow by 2.7 percent this year.
Considering its strategic orientation of
growing through acquisition, ACT has some latitude
at the rating for periodically elevated leverage, but we believe that negative rating pressure would emerge if a transaction caused fully adjusted debt to EBITDA to exceed 3.5 x with risky prospects for a return to below 3.0 x. Moreover, the rating would be under pressure if increased competition caused weaker
earnings, particularly from merchandise and services, keeping debt to EBITDA above 3x.
However, 2016 saw wages climb
at a somewhat faster rate, with average hourly
earnings growing in a range of 2.2 % to 2.6 % year - over-year, and hitting a post-recession high of 2.8 % in October before coming in
at 2.5 % in November.
The company is selling out of product,
growing quickly and trading
at a cheap nine times
earnings.
If you look
at DuPont's continuing businesses — not the ones it has gotten out of, or the ones it is spinning off — its operating
earnings per share have
grown by 19 % a year on average since Kullman took over, according to the company.
He expects a new product cycle in the second half of the year, adding «if you take a step back
at Apple, even with this slowdown in
earnings growth, they're
growing at 10 percent.»
Loblaw warned that full - year
earnings will be lower than in 2011, as its operations aren't
growing at a rate fast enough to cover the IT and supply chain investment.
6:04 p.m. ET: Profits may not be rising
at Yahoo, but the company's
earnings release shows that one thing is
growing rapidly — unfortunately, it's «traffic acquisition costs,» which are the marketing payments the company makes (as all search - oriented companies do) to partners to promote traffic.
«NBCUniversal continues to
grow at a faster pace than any of us originally imagined,» CEO Brian Roberts said on the
earnings call.
«We believe the bias for stock prices in general remains to the upside, underpinned by a
growing economy, low interest rates and increasingly, cheaper oil... With operating margins
at elevated levels, top line growth is poised to more quickly bleed through to the bottom line, thus supporting
earnings.»
At the point the growth began to slow, the multiple would contract, meaning that even if its
earnings do
grow 600 % in the next few years, if it becomes subject to the law of big numbers - that ever increasing amounts eventually forge their own anchor - the result would be a market capitalization substantially similar to today, leading to no increase in the stock price over a long period of time.
However,
at nearly 63 times current
earnings - a whopping p / e ratio, to be sure - even if the firm were to
grow its profit to the level of Berkshire - $ 8.5 billion - it would still lack the liquid assets and marketable securities the house that Warren Buffett built has, and it would not have a diversified income stream, making it far more vulnerable to changes in the competitive landscape; a major concern when you contemplate that Google operates in an industry where dramatic shifts consumer behavior can happen overnight.
Moreover, CBO's latest baseline assumptions predict
earnings to
grow faster for high - income earners than for others in the next decade, [32] suggesting that the Great Recession and financial crisis may have had only a temporary impact on the rising trend of income gains
at the top, much as the impact of the dot - com collapse in the early 2000s was only temporary.
For a bank
growing the balance sheet and
earnings at such a rapid pace, the current valuation is reasonable, if not cheap.
In recent history, CIBC has
grown their
earnings per share
at a rate right around the middle of their peer group.
They were a rapidly
growing company that traded
at a high multiple of
earnings, and a high ratio to their book value.
Analysts estimate the stock will
grow earnings by more than 18 percent in 2017 — the stock trades
at just 14 times 2017 estimates.
The
earnings yield on enormous blue - chip stocks such as Wal - Mart, which had little chance to
grow at historical rates due to sheer size, was a paltry 2.54 % compared to the 5.49 % you could get holding long - term Treasury bonds.
27 % of TD's 2015
earnings came from their U.S. Retail segment, which is
growing at a much faster pace than the Canadian Retail equivalent.
So they're buying these, these are hope stocks based on the future, they are training
at 40, 50, 100 times
earnings and but there are other reasons why people like them, maybe sales are
growing really quickly your other aspects of the fundamentals are going well so we balance those fundamental.
Earnings are
growing at a faster than 10 % pace in all major regions for the first time since 2005, excluding the post-crisis bounce, our research shows.
Typically, these stocks are
growing their
earnings at a rate of 30 to 40 % (or more) quarter after quarter.
I recently ran a screen seeking brand - name stocks selling for about 10 times
earnings or below, and projected to
grow earnings at better than 10 % annually over the next five years.
But here's the thing: Despite near - term weakness in sales and
earnings, analysts still see a bright future for American Outdoor Brands, and they predict the stock will turn around and
grow earnings at about 15 % annually over the next five years.
Since
earnings growth for the S&P 500 has never
grown faster than about 6 % annually when properly measured from peak - to - peak or trough - to - trough, we're talking about a long term total return of about 7.2 % if - and it's a big if - P / E ratios were held
at current extremes forever.
Remember that if the S&P 500 P / E ratio could be held constant, prices would by definition
grow at the same rate as
earnings.
At this time, the dividend payment is not at risk and management expects strong dividend growth for the upcoming years as earnings should grow at a 6 - 8 % rate towards 202
At this time, the dividend payment is not
at risk and management expects strong dividend growth for the upcoming years as earnings should grow at a 6 - 8 % rate towards 202
at risk and management expects strong dividend growth for the upcoming years as
earnings should
grow at a 6 - 8 % rate towards 202
at a 6 - 8 % rate towards 2020.
But if you are a high - flying growth company that is expected to
grow earnings per share
at 20 % every year, and you know that your stock price will plummet the first moment you post disappointing results, the incentive to engage in fraudulent behavior seems a lot greater.
A business that can
grow intrinsic value
at say 12 - 15 % over an extended period of time will create enormous wealth for its owners over time, regardless of what the economy does, or what the stock market does, or what
earnings multiples do, etc...
Much of that projected
earnings increase is coming from tax cuts and some from expectations that companies» revenue would
grow at a nice clip as global growth stayed strong.