Friday, July 2, 2010

Long Term View: Steel & Tube Ltd

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

Steel & Tube Ltd [STU.NZ] has been a spectacular investment for those who have been shareholders since its listing in September 1967 and even better for its founders who established the company in 1953. We will start at an adjusted $1.00 share price and will use financial data from 1987 to make our comparison. (Figures for 1967-1987 are not easily obtainable so annual and overall returns are likely to be higher)

With $4.73c in net dividends (excluding the NZX listed period 1967-1987. No data can be easily found for dividends) and 30% more in tax credits (see chart above) plus a 1:1 bonus share issue in 1997 gives STU a slightly more than 829% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends and tax credits in its calculation) over the nearly 23 year listing of STU (again, the period between 1967 and 1987 is excluded because no share price or dividend details are available so the return will be higher than stated here for this period), gives an approximate annual net return of just over 36%.

This is approximately a 470% better return when compared to the average of all NZX indexes.

Disc I own STU shares in the Share Investor Portfolio

Long Term View Series

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Fletcher Building Ltd
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Fisher & Paykel Healthcare
Freightways Ltd
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Hallenstein Glasson Holdings Ltd
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Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
New Zealand Refining Ltd
Port Of Tauranga Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Telecom NZ Ltd
Telstra Corp Ltd
The Warehouse Group Ltd

Steel & Tube @ Share Investor

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Discuss STU @ Share Investor Forum

Download STU Company Reports

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The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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