If you're unsure of your Jollibee stock investments, this post will help you see through the growth possibilities of the company 10 years from now.

Whether you're looking forward to buy this stock for the first time, add an existing position or take profits, this post is definitely for you.

We'll look into JFC's earnings, rate of returns and projected annual compounding rates. Understanding these data will help you make informed decisions.

For my previous analysis, you can read them here and here.

These are the EPS taken from Morningstar.com.

From 2007 to 2016, the earnings has shown a very nice upward trend showing no signs of slowing down. This is a good indicator of a good company that can grow its book value overtime.

The data shows that earnings grow at a rate of 10.3% per year.

This simple analysis tells us directly of a possible economic moat that JFC possess. From this, we can say that JFC is really a good company to invest.

But at what price? We'll see below.

The values are calculated by taking the averages of the P/E ratios based on the high, low and close of the last trading day of the year. The 10-year average is then calculated by getting the average from 2007 to 2016.

JFC's P/E ratio ranged from 18 to 46 and averaged at 30.17 for the last 10 years. This data is important to project the future price of the stock.

If you buy the whole business at P301 billion (P277.60 x 1,085,321,234 shares outstanding), you expect to get a 2% return which is low.

To get a return equal to a 10-year gov't bond which is 5.8%, you should own the stock at P97.33 per share.

The calculated projected price at the 10th year is P474.87 per share. If you bought the stock at P277.60 at the 0th year, your pre-tax CAGR would be 6.1%.

Suppose you decide to sell the stock on its 10th year, your profit would be P197.27 per share (P474.87-P277.60). After paying taxes at a rate of 30%, your after tax profit would be P138.09 per share. Take note that this excludes dividends.

Total projected dividends earned within the period equates to P32.77 per share. After paying 10% income tax, it now equates to P29.49 per share.

Adding the after tax profits (capital gains and dividends) equates to P167.58. If you add that to the stock price (P277.60 + P167.58), the after tax proceeds now equates to P445.18. With this number, we can calculate our after tax CAGR and this equates to 5.4%.

Retained Earnings Utilization - it can be argued that the increase in earnings which amounts to 3.30 (5.64 - 2.34) can be attributed to the effective use of its retained earnings. Total REPS from the period amounted to 24.04.  Overall, this gives a return of 13.7% (3.30/24.04).

From this analysis, we can conclude that buying JFC at P277.60 per share and holding it for 10 years will result to an annual growth rate performance of 6.1%. Selling it after 10 years will result to an annual growth rate performance of 5.4%.

In monetary terms, a P1 million investment in JFC may result to around P1.7 million after 10 years.

Investing in JFC for the long-term I believe will definitely make our money grow. In 10 year's time, I expect JFC to reach at least P500 per share.

But in order to get higher returns, we should buy the stock on dips and corrections.

The best price to buy this stock to get at least 12% returns is around the P170 - P180 area. But will the stock drop at these levels? Maybe,.. or maybe not.

The stock has been overvalued for quite some time now. But if you're okay with a theoretical CAGR projections of 5% - 6%, then I can say that it's worth a buy. There are better stocks to consider while waiting for a good entry and one stock I'm looking into now is San Miguel Purefoods Company (PF).

Me? I'll still wait for a better price to enter. A profit taking scenario may drive the stock price down so possible retracements and monthly pivot point price levels should be watched.

This concludes my Jollibee stock review. Thanks for reading and if you have any comments and insights about this stock, I would love to see them in the comments section.

Happy investing!