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Where to next for the CSL Limited share price?

Credit: PerformanceHealth

CSL Limited (ASX: CSL) shares closed Friday’s trading session at $99.65 after once again breaking through the $100 mark during the session.

At these levels the company has a staggering market value of $45.6 billion.

On the face of it, the share price and the market capitalisation sound like big numbers – which they are – but that doesn’t mean they couldn’t trend higher still.

Consider these facts…

  • CSL has grown its revenue from US$136 million in 1994 to US$5.5 billion in 2015. In doing so, the company has gone from a small-cap to one of the 10 largest ASX-listed companies.
  • Over the past two decades since CSL’s initial public offering (IPO), the group has also expanded from holding less than 1% of the global plasma market to capturing over 20% market share today.
  • As a listed entity, CSL has produced a total shareholder return of 24.8% per annum over the past 10 years.
  • Over the past five years the dividend has increased from 80 cents per share (cps) to $1.64 per share.
  • The company has always been keenly aware of its duty to create shareholder value and allocate shareholder capital wisely. One way enhanced shareholder value has been achieved by the board is through repeated share buy-backs. A $950 million buy-back was announced at the Annual General Meeting in October – this continues a trend of buy-backs which began in 2005.

Plenty more scope for growth

While CSL may not be about follow in the footsteps of Blackmores Limited (ASX: BKL) which after busting through the $100 share price level in August, proceeded to steam towards the $200 price level in the course of just a few short months, the long term potential for CSL to reach a higher share price seems very feasible.

As with other health related stocks, such as Ramsay Health Care Limited (ASX: RHC), the long-term pipeline of global growth opportunities and attractive margins which the health sector offers firms like CSL provides plenty more scope for long-term earnings growth potential.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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