A look at fundamentals of Cleanway Waste Management (ASX: CWY)

January 05, 2024 07:01 PM AEDT | By Team Kalkine Media

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A look at fundamentals of Cleanway Waste Management (ASX: CWY) — Image source: © Artinspiring | Megapixl.com

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Cleanaway Waste Management Limited (ASX: CWY) has witnessed a substantial 50% increase in its share price over the past five years, surpassing the market return by approximately 22%. However, recent gains have been marginal, with shareholders gaining a mere 3.5%, inclusive of dividends.

Evaluating the Underlying Fundamentals

Despite the impressive share price performance, Cleanaway Waste Management's earnings per share (EPS) has experienced a decline of 30% annually over the same period, contradicting the strong stock performance.

Revenue Growth and Earnings Evaluation

While the EPS decrease doesn't align with the share price growth, the company boasts a revenue growth rate of 12% annually, indicating potential growth initiatives that might be prioritizing expansion over immediate EPS growth.

Insights from Insider Activity and Future Outlook

Notably, insiders' purchases of company share in the past year depict confidence in the company's future performance. However, the focus on future earnings remains pivotal in determining shareholder profitability.

Importance of Dividends in Shareholder Returns

Differentiating between share price return and total shareholder return (TSR) unveils a comprehensive picture. With a TSR of 65% over the last five years, including dividends, Cleanaway Waste Management exhibits a stronger performance compared to sole share price growth.

Conclusion: Long-Term Performance and Growth Strategy

Despite the recent lag behind the market average, Cleanaway Waste Management showcases a robust long-term track record, delivering an annual TSR of 10% over five years. The current share performance might denote a strategic pause as the company executes its growth strategies. Understanding the company's performance requires a deeper analysis of multiple factors.

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