Over the past five years, Adairs (ASX:ADH) stock has outperformed the growth of its underlying earnings.

April 15, 2025 10:30 AM AEST | By Team Kalkine Media
 Over the past five years, Adairs (ASX:ADH) stock has outperformed the growth of its underlying earnings.
Image source: Shutterstock

Highlights

  • Adairs Limited (ADH) shares down by 11% this quarter.
  • Shares gained 71% over five years, just shy of market returns.
  • Total Shareholder Return for five years stands at 130% including dividends.

Shareholders of Adairs Limited (ASX:ADH) have experienced a bit of a rocky quarter, with its share price seeing an 11% dip. However, looking back over the past five years, the picture isn't all that dim; the shares have appreciated by 71%. While this is slightly below the broader market's 74% return over the same period, Adairs has demonstrated solid growth.

Recently, Adairs has shown a favorable performance over the past week, prompting a closer look at how the company's fundamentals have influenced long-term shareholder returns. Over this five-year period, the company's earnings per share (EPS) have increased by 2.1% annually, which is less aggressive than the stock's average annual increase of 11%. This growth disparity suggests a heightened market perception of Adairs' business potential.

One shining aspect for Adairs is the Total Shareholder Return (TSR) over the last five years, which stands impressively at 130%. This figure outstrips the plain share price return, largely due to the company's dividend contributions, providing a fuller picture of shareholder value.

Over the last year, Adairs has continued to reward its stockholders, with a TSR of 4.2%, considering dividends. Although this falls short of the five-year annual rate of 18%, the company continues to attract interest due to its business performances.

While stock price is often used as a gauge for company performance, it's crucial to consider broader aspects like investment risks. For instance, Adairs has a noted warning sign that prospective investors should review.

Those with an interest in how insiders are influencing company dynamics might find it worthwhile to explore other small-cap companies with attractive valuations where insider actions suggest confidence.


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