Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in RBC Bearings (NYSE:RBC). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide RBC Bearings with the means to add long-term value to shareholders.

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How Fast Is RBC Bearings Growing Its Earnings Per Share?

RBC Bearings has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. Thus, it makes sense to focus on more recent growth rates, instead. RBC Bearings' EPS has risen over the last 12 months, growing from US$6.03 to US$6.94. That's a 15% gain; respectable growth in the broader scheme of things.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for RBC Bearings remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 4.7% to US$1.6b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.NYSE:RBC Earnings and Revenue History May 6th 2025

View our latest analysis for RBC Bearings

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for RBC Bearings' future EPS 100% free.

Are RBC Bearings Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$11b company like RBC Bearings. But we are reassured by the fact they have invested in the company. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$175m. Holders should find this level of insider commitment quite encouraging, since it would ensure that the leaders of the company would also experience their success, or failure, with the stock.

Story Continues

It means a lot to see insiders invested in the business, but shareholders may be wondering if remuneration policies are in their best interest. A brief analysis of the CEO compensation suggests they are. The median total compensation for CEOs of companies similar in size to RBC Bearings, with market caps over US$8.0b, is around US$14m.

RBC Bearings' CEO took home a total compensation package worth US$9.0m in the year leading up to March 2024. That comes in below the average for similar sized companies and seems pretty reasonable. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. Generally, arguments can be made that reasonable pay levels attest to good decision-making.

Does RBC Bearings Deserve A Spot On Your Watchlist?

One important encouraging feature of RBC Bearings is that it is growing profits. The growth of EPS may be the eye-catching headline for RBC Bearings, but there's more to bring joy for shareholders. Boasting both modest CEO pay and considerable insider ownership, you'd argue this one is worthy of the watchlist, at least. We should say that we've discovered 1 warning sign for RBC Bearings that you should be aware of before investing here.

Although RBC Bearings certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of companies that not only boast of strong growth but have strong insider backing.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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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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