Investing in Taiga Building Products (TSE:TBL) five years ago would have delivered you a 296% gain

January 3, 2025

The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. Long term Taiga Building Products Ltd. (TSE:TBL) shareholders would be well aware of this, since the stock is up 235% in five years. Meanwhile the share price is 1.0% higher than it was a week ago.

Let’s take a look at the underlying fundamentals over the longer term, and see if they’ve been consistent with shareholders returns.

View our latest analysis for Taiga Building Products

To quote Buffett, ‘Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace…’ One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over half a decade, Taiga Building Products managed to grow its earnings per share at 20% a year. This EPS growth is slower than the share price growth of 27% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. That’s not necessarily surprising considering the five-year track record of earnings growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
TSX:TBL Earnings Per Share Growth January 3rd 2025

This free interactive report on Taiga Building Products’ earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

We’d be remiss not to mention the difference between Taiga Building Products’ total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Taiga Building Products’ TSR of 296% for the 5 years exceeded its share price return, because it has paid dividends.

We’re pleased to report that Taiga Building Products shareholders have received a total shareholder return of 31% over one year. Having said that, the five-year TSR of 32% a year, is even better. Is Taiga Building Products cheap compared to other companies? These 3 valuation measures might help you decide.

But note: Taiga Building Products may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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