This figure represents the compounded or annualized growth rate per share in a company's shareholders’ equity, or book value. The one-year growth rate is calculated from the second fiscal year (FY2) to the most recently completed fiscal year (FY1); the three-year growth rate is calculated from the fourth fiscal year (FY4) to the most recently completed fiscal year (FY1). Equity per share represents the net-asset value backing up each share of the company's stock. Growth in equity per share is therefore one of the key variables in determining if a company is increasing shareholder wealth over time. Note, too, that because it's expressed on a per-share basis, equity growth per share takes into account dilution from new-share issuances.
Benefit
Equity is a company’s total assets minus its total liabilities—in other words, what’s left over for shareholders. Equity growth per share shows how quickly shareholders’ stake in the company is growing.
Origin
The company’s shareholders’ equity is found in the most-recent balance sheets from its annual report or 10-Q report.
For the Pros
Equity growth per share typically comes from two sources: retained earnings (earnings the company does not pay out as dividends) and new share issuances. High equity growth per share through retained earnings is the sign of a healthy, growing company. High equity growth per share through new share issuances is typically the sign of a young, capital-hungry company. Negative equity growth per share isn’t necessarily bad: Although it sometimes means the company is losing money (retained earnings are negative), it can also mean the company has bought back shares or boosted dividends.