Buy now if you want it
EOH results saw revenue up 21% while headline earnings per share (HEPS) and the dividend increased only 16%, which is the wrong way around as HEPS and dividends should increase faster than revenue. This is especially strange as operating margins increased. But a few small hits hurt, such as currency moves going from a R36m profit to a R44m loss. Overall the results are solid, but growth by acquisition becomes harder as the company becomes larger. So the days of HEPS growth of 30% are likely over and the trend has been for HEPS growth to slowly shift lower, having been 25% for full year 2016, 29% in 2015, 31.7% in 2014, and so the trend continues. That all said, at a price of just below R100, the historic price-to-earnings multiple (P/E) is around 11 times and those who’ve been waiting for an entry into EOH have an excellent buying price, although future returns will be more modest than before.
EOH’s head office in Johannesburg.