Kumba Iron Ore’s (JSE:KIO) five-year earnings growth trails the shareholder returns

Simply Wall St

Thu, February 12, 2026 at 1:07 PM GMT+9 3 min read

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KIROY

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Kumba Iron Ore Limited (JSE:KIO) shareholders should be happy to see the share price up 16% in the last quarter. But that doesn’t change the fact that the returns over the last five years have been less than pleasing. After all, the share price is down 39% in that time, significantly under-performing the market.

On a more encouraging note the company has added R4.1b to its market cap in just the last 7 days, so let’s see if we can determine what’s driven the five-year loss for shareholders.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the unfortunate half decade during which the share price slipped, Kumba Iron Ore actually saw its earnings per share (EPS) improve by 0.08% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Alternatively, growth expectations may have been unreasonable in the past.

Based on these numbers, we’d venture that the market may have been over-optimistic about forecast growth, half a decade ago. Having said that, we might get a better idea of what’s going on with the stock by looking at other metrics.

We note that the dividend has remained healthy, so that wouldn’t really explain the share price drop. It could be that the revenue decline of 3.9% per year is viewed as evidence that Kumba Iron Ore is shrinking. With revenue weak, and increased payouts of cash, the market might be taking the view that its best days are behind it.

The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

JSE:KIO Earnings and Revenue Growth February 12th 2026

If you are thinking of buying or selling Kumba Iron Ore stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Kumba Iron Ore, it has a TSR of 9.4% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

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A Different Perspective

Kumba Iron Ore shareholders gained a total return of 26% during the year. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 1.8% per year over five year. It is possible that returns will improve along with the business fundamentals. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We’ve spotted ** 2 warning signs for Kumba Iron Ore** you should be aware of, and 1 of them is potentially serious.

We will like Kumba Iron Ore better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South African exchanges.

Have feedback on this article? Concerned about the content? Get in touch** with us directly.**_ Alternatively, email editorial-team (at) simplywallst.com._

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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