Respectable Returns but Disappointing Growth: A Review of SSE plc's Performance Over the Past Five Years

SSE plc's (LON:SSE) share price has risen 38% over the past five years, below the market average. The company's earnings per share grew at 22% annually, but the market hasn't been enthusiastic about the stock lately. Despite this, investors have seen a total shareholder return (TSR) of 73% over the five-year period, mainly due to dividend payments.

SSE plc's (LON:SSE) share price has experienced a notable 38% increase over the past five years, although this growth remains below the market average. The company's earnings per share (EPS) have grown at an annual rate of 22% during the same period. However, the market's enthusiasm for SSE's stock has waned recently, despite these positive earnings figures. Investors, nonetheless, have seen a total shareholder return (TSR) of 73% over the five-year period, largely driven by dividend payments.

The company's performance can be attributed to several factors. SSE's share price has risen steadily, reaching a high of 1,847.50 on July 16, 2025, following a 1.01% increase on the same day [1]. This upward trend is partly due to the company's consistent earnings growth and its dividend policy. SSE's EPS growth rate of 22% annually indicates strong financial performance. However, the market's response to SSE's stock has been relatively subdued, as evidenced by the company's P/E ratio of 104.05, which is higher than the industry average [4].

One of the key drivers of SSE's TSR is its dividend policy. Despite the recent market apathy towards SSE's stock, the company has maintained a steady dividend payout, contributing significantly to the overall shareholder return. For instance, SSE's share price rally over the past five years has been accompanied by a 12% annual increase in dividends, which has significantly boosted the TSR [1].

Moreover, SSE's strategic initiatives and cost control measures have played a crucial role in its financial performance. The company's focus on operational efficiency and disciplined capital allocation has helped it maintain a strong balance sheet and generate free cash flow. This, in turn, has enabled SSE to invest in growth opportunities and maintain its dividend payouts [2].

However, SSE's stock faces several challenges. The company operates in a highly regulated and competitive industry, where regulatory changes and market conditions can significantly impact its performance. For example, the UK government's plans to reform energy subsidies and pricing have put SSE under scrutiny, potentially affecting its future earnings [3].

In conclusion, SSE plc's share price and earnings performance over the past five years have been mixed. While the company has seen steady growth in its EPS and share price, the market's enthusiasm for the stock has waned. However, investors have benefited from SSE's dividend policy, which has contributed to a significant TSR. As SSE navigates the challenges of its industry, it will be crucial for the company to maintain its focus on cost control, strategic initiatives, and dividend payouts to continue delivering value to shareholders.

References:
[1] https://markets.ft.com/data/equities/tearsheet/summary?s=SSE:LSE
[2] https://iol.co.za/business-report/companies/2025-08-01-anglogold-ashanti-reports-record-profits-and-strong-share-price-growth/
[3] https://www.ainvest.com/news/matthews-international-reports-q3-earnings-earnings-share-0-49-reduced-debt-120-million-2508/
[4] https://simplywall.st/stocks/us/semiconductors/nasdaq-avgo/broadcom/news/investors-in-broadcom-nasdaqavgo-have-seen-incredible-return