Saudi Arabia: Yanbu Cement Faces a 3.9% Stock Decline

Yanbu Cement Company experienced a 3.9% decline in its stock price over the past week, continuing a negative trend as the company's three-year earnings and shareholder returns also trend downward.

Saudi Arabia: Yanbu Cement Faces a 3.9% Stock Decline
Photo by Imam Abiyyu / Unsplash

Yanbu Cement Company, a significant player in the cement industry, has been facing challenges reflected in its share price, earnings per share (EPS), and total shareholder return (TSR). Over the past three years, the company's EPS has declined at a compound annual rate of 18%, a stark contrast to the 12% annual compound share price decline. This discrepancy suggests that the market may have already adjusted its expectations based on the company's earnings performance.

The company's TSR over the last three years was -21%, which, while still negative, outperforms the share price return. This indicates that dividends paid to shareholders have provided some cushion against the share price decline.

Looking at the broader perspective, Yanbu Cement's shareholders have faced an 8.2% loss over the past year, including dividends, even as the market itself has risen by 20%. This underperformance highlights the importance of examining fundamental metrics and growth trends of a business before making investment decisions.

Despite the recent downturn, long-term shareholders have seen a 7% annual return over the past five years, suggesting that the company has potential for recovery and growth. Investors and stakeholders are encouraged to look for signs of long-term growth trends and consider the company's efforts to mitigate the impact of challenging market conditions.

Source: Simply Wall St