Q: For a conservative dividend company, X stock had a rather large move during the past 12 months. Can you please comment on the current valuation, relative to its long-term valuation? Have the earnings roughly matched the increase in share price?
Thanks.
Thanks.
5i Research Answer:
X is up 37% YTD. At 27X earnings, it's at the high end of its historical valuation. It has been higher than 30X, at times. EPS has more than doubled since 2018 and the share price has 2.5X'd in that time. We like the company's dominant market share, and lower interest rates should help its valuation. But we can't call it cheap, and we might expect some consolidation around its big gains this year.