Since March 2021, the S&P 500 has delivered a total return of 72.4%. But one standout stock has more than doubled the market - over the past five years, WisdomTree has surged 164% to $15.97 per share. Its momentum hasn’t stopped as it’s also gained 13.2% in the last six months thanks to its solid quarterly results, beating the S&P by 10.1%.
Is now still a good time to buy WT? Or are investors being too optimistic? Find out in our full research report, it’s free.
Why Are We Positive On WT?
Originally founded as a financial media company before pivoting to ETF management in 2006, WisdomTree (NYSE: WT) is a financial services company that creates and manages exchange-traded funds (ETFs) and other investment products for individual and institutional investors.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
Over the last five years, WisdomTree grew its revenue at an impressive 14.6% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
WisdomTree’s EPS grew at 28% compounded annual growth rate over the last five years, higher than its 14.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Stellar ROE Showcases Lucrative Growth Opportunities
Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.
Over the last five years, WisdomTree has averaged an ROE of 17%, impressive for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows WisdomTree has a strong competitive moat.
Final Judgment
These are just a few reasons why we think WisdomTree is an elite financials company, and with its shares beating the market recently, the stock trades at 14.8× forward P/E (or $15.97 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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