While much investor excitement in the tech space recently has been focused on the fast-growing AfterPay Touch Group Ltd (ASX: APT) share price, there’s a far more established digital business that has thumped its returns, albeit over a far longer time frame.
But every share market investor in Australia will know it and be familiar with its administrative services.
In fact, you could say it’s right under their noses.
Its share price is down 1% today, but its management did boast at today’s AGM how it has returned 16,204% since its May 1994 IPO versus 204% for the wider S&P / ASX200 (ASX: XJO).
The company is Computershare Limited (ASX: CPU) and it’s a good demonstration of the power of compounding and buy-to-hold-quality-company investment strategies, as over this period the Computershare share price has taken many big falls as well.
For example, between July and August 2015 the stock lost 25% of its value in weeks but still went on to double again over the next three years.
In fact, despite October 2018’s stock market crash, Computershare shares are up 20% plus dividends over the course of 2018 after the group grew earnings per share an impressive 14.1% over the 12 months ending June 30, 2018.
Over the year it also delivered record dividends of 63.4 US cents, with the final full year dividend lifted 11%.
What’s more important is that the group today confirmed it is “confidently” forecasting management earnings per share growth of around 10% over the course of FY 2019.
The group has managed to grow over the years organically and via a lot of acquisitions that have recently seen it move deep into the mortgage services business in the UK and US.
Its long-term success also shows how important it is to find businesses with attractive economics in generating organic growth, alongside recurring revenues on good profit margins.
Given its track record and forecast for another year of double-digit growth, Computershare looks about fair value on 22x trailing earnings per share.
We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.
That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.
We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!
Motley Fool contributor Yulia Mosaleva owns shares of Xero. The Motley Fool Australia owns shares of AFTERPAY T FPO, WiseTech Global, and Xero. The Motley Fool Australia has recommended Computershare. 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 Scott Phillips.