Investing in ClearView Wealth (ASX:CVW) five years ago would have delivered you a 120% gain

editorial-team@simplywallst.com (Simply Wall St)

Sun, May 11, 2025, 4:10 PM 3 min read

When we invest, we're mostly looking for stocks that outperform the marketplace average. And successful our experience, buying the close stocks tin springiness your wealthiness a important boost. For example, agelong word ClearView Wealth Limited (ASX:CVW) shareholders person enjoyed a 88% stock terms emergence implicit the past fractional decade, good successful excess of the marketplace instrumentality of astir 52% (not including dividends).

So let's measure the underlying fundamentals implicit the past 5 years and spot if they've moved successful lock-step with shareholder returns.

This exertion could regenerate computers: observe the 20 stocks are moving to marque quantum computing a reality.

To paraphrase Benjamin Graham: Over the abbreviated word the marketplace is simply a voting machine, but implicit the agelong word it's a weighing machine. One flawed but tenable mode to measure however sentiment astir a institution has changed is to comparison the net per stock (EPS) with the stock price.

Over fractional a decade, ClearView Wealth managed to turn its net per stock astatine 46% a year. The EPS maturation is much awesome than the yearly stock terms summation of 13% implicit the aforesaid period. So 1 could reason that the broader marketplace has go much cautious towards the stock.

The representation beneath shows however EPS has tracked implicit clip (if you click connected the representation you tin spot greater detail).

It's bully to spot that determination was immoderate important insider buying successful the past 3 months. That's a positive. On the different hand, we deliberation the gross and net trends are overmuch much meaningful measures of the business. It mightiness beryllium good worthwhile taking a look astatine our free report connected ClearView Wealth's earnings, gross and currency flow.

It is important to see the full shareholder return, arsenic good arsenic the stock terms return, for immoderate fixed stock. The TSR incorporates the worth of immoderate spin-offs oregon discounted superior raisings, on with immoderate dividends, based connected the presumption that the dividends are reinvested. Arguably, the TSR gives a much broad representation of the instrumentality generated by a stock. As it happens, ClearView Wealth's TSR for the past 5 years was 120%, which exceeds the stock terms instrumentality mentioned earlier. The dividends paid by the institution person thusly boosted the total shareholder return.

Investors successful ClearView Wealth had a pugnacious year, with a full nonaccomplishment of 21% (including dividends), against a marketplace summation of astir 8.8%. However, support successful caput that adjacent the champion stocks volition sometimes underperform the marketplace implicit a 12 period period. On the agleam side, agelong word shareholders person made money, with a summation of 17% per twelvemonth implicit fractional a decade. It could beryllium that the caller sell-off is an opportunity, truthful it whitethorn beryllium worthy checking the cardinal information for signs of a agelong word maturation trend. It's ever absorbing to way stock terms show implicit the longer term. But to recognize ClearView Wealth better, we request to see galore different factors. Consider risks, for instance. Every institution has them, and we've spotted 1 informing motion for ClearView Wealth you should cognize about.