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Sorry if I'm missing something, but is your interpretation of owner's earnings correct? Dividends tend to come out of EPS (or retained earnings), so if you're adding the dividend back into EPS you'll be adding funds that don't actually exist.
Legendary quality investor François Rochon stated that in the long-term stock prices will
always follow the owner’s earnings and that you can track the owner’s earnings as follows:
Owner’s earnings = Growth in Earnings Per Share + Dividend Yield
Here’s an overview of the evolution of Ulta Beauty’s owner’s earnings:
Growth owner’s earnings
CAGR Owner’s earnings (3 years) 25.4%
CAGR Owner’s earnings (5 years) 26.9%
CAGR Owner’s earnings (10 years) 24.2%
How did you calculate this owner’s earnings in ulta beauty investment case? Please explain with numbers!
Sorry if I'm missing something, but is your interpretation of owner's earnings correct? Dividends tend to come out of EPS (or retained earnings), so if you're adding the dividend back into EPS you'll be adding funds that don't actually exist.