If you want to compound wealth in the stock market, you can do so by buying an index fund. But the truth is, you can make significant gains if you buy good quality businesses at the right price. For example, the FirstRand Limited (JSE:FSR) share price is 71% higher than it was five years ago, which is more than the market average. Over the last year the stock price is up, albeit only a modest 2.0%.
With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Over half a decade, FirstRand managed to grow its earnings per share at 20% a year. The EPS growth is more impressive than the yearly share price gain of 11% over the same period. So it seems the market isn’t so enthusiastic about the stock these days. The reasonably low P/E ratio of 10.72 also suggests market apprehension.
The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).
JSE:FSR Earnings Per Share Growth November 9th 2025
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of FirstRand, it has a TSR of 131% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
FirstRand shareholders are up 8.4% for the year (even including dividends). Unfortunately this falls short of the market return. It’s probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 18% over five years. It’s quite possible the business continues to execute with prowess, even as the share price gains are slowing. It’s always interesting to track share price performance over the longer term. But to understand FirstRand better, we need to consider many other factors. For example, we’ve discovered 1 warning sign for FirstRand that you should be aware of before investing here.
But note: FirstRand may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South African exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
It looks like J Sainsbury plc (LON:SBRY) is about to go ex-dividend in the next 3 days. The ex-dividend date is two business days before a company’s record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Therefore, if you purchase J Sainsbury’s shares on or after the 13th of November, you won’t be eligible to receive the dividend, when it is paid on the 19th of December.
The company’s next dividend payment will be UK£0.151 per share, on the back of last year when the company paid a total of UK£0.14 to shareholders. Last year’s total dividend payments show that J Sainsbury has a trailing yield of 3.9% on the current share price of UK£3.492. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it’s growing.
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If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Its dividend payout ratio is 75% of profit, which means the company is paying out a majority of its earnings. The relatively limited profit reinvestment could slow the rate of future earnings growth. We’d be worried about the risk of a drop in earnings. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Fortunately, it paid out only 28% of its free cash flow in the past year.
It’s positive to see that J Sainsbury’s dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
View our latest analysis for J Sainsbury
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
LSE:SBRY Historic Dividend November 9th 2025
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. That’s why it’s comforting to see J Sainsbury’s earnings have been skyrocketing, up 26% per annum for the past five years. Earnings per share are growing at a rapid rate, yet the company is paying out more than three-quarters of its earnings.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. J Sainsbury’s dividend payments are broadly unchanged compared to where they were 10 years ago.
Has J Sainsbury got what it takes to maintain its dividend payments? J Sainsbury’s growing earnings per share and conservative payout ratios make for a decent combination. We also like that it paid out a lower percentage of its cash flow. There’s a lot to like about J Sainsbury, and we would prioritise taking a closer look at it.
On that note, you’ll want to research what risks J Sainsbury is facing. Every company has risks, and we’ve spotted 1 warning sign for J Sainsbury you should know about.
If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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Given the large stake in the stock by institutions, Distribution Finance Capital Holdings’ stock price might be vulnerable to their trading decisions
52% of the business is held by the top 5 shareholders
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
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If you want to know who really controls Distribution Finance Capital Holdings plc (LON:DFCH), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 79% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let’s delve deeper into each type of owner of Distribution Finance Capital Holdings, beginning with the chart below.
Check out our latest analysis for Distribution Finance Capital Holdings
AIM:DFCH Ownership Breakdown November 9th 2025
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Distribution Finance Capital Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Distribution Finance Capital Holdings’ earnings history below. Of course, the future is what really matters.
AIM:DFCH Earnings and Revenue Growth November 9th 2025
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don’t have a meaningful investment in Distribution Finance Capital Holdings. Looking at our data, we can see that the largest shareholder is Watrium AS with 19% of shares outstanding. With 11% and 9.1% of the shares outstanding respectively, Janus Henderson Group plc and River Global Investors LLP are the second and third largest shareholders.
Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that Distribution Finance Capital Holdings plc insiders own under 1% of the company. However, it’s possible that insiders might have an indirect interest through a more complex structure. It appears that the board holds about UK£724k worth of stock. This compares to a market capitalization of UK£87m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
The general public– including retail investors — own 11% stake in the company, and hence can’t easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
We can see that Private Companies own 6.5%, of the shares on issue. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
It’s always worth thinking about the different groups who own shares in a company. But to understand Distribution Finance Capital Holdings better, we need to consider many other factors. Take risks for example – Distribution Finance Capital Holdings has 2 warning signs (and 1 which is potentially serious) we think you should know about.
If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
