£10,000 investment Game workshops (LSE:GAW) shares issued five years ago have a market value of £18,285. Add to this £2,307 worth of dividends and the total return is over 100%.

This is a unique comeback. I also think investors looking for stocks to buy can learn a lot from what stocks – and the underlying business – have done since 2020.

Lesson 1: pricing

Games Workshop stock may seem pricey with a price-to-earnings (P/E) ratio of around 28. That’s well above FTSE100 average, and investors would dare to bet on the further development of this multiplier in the future.

Importantly, however, in 2020, the company’s shares were trading at a similar level and since then, investors have been doing very well. The reason is that the company’s sales and profits have grown impressively since then.

Games Workshop P/E Ratio 2020-2025

Created in TradingView

Revenues more than doubled and earnings per share increased 143%. That’s why the share price has increased significantly, even though the stock was at a high level five years ago.

The lesson for investors is that a high P/E ratio does not automatically mean a stock is overvalued. If the company can grow, its stock could be a bargain even at a high earnings multiple.

Lesson 2: dividends

When it comes to dividends, it’s natural for investors to pay attention to two things. One is the long history of growing profits, and the other is the wide discrepancy between the amount the company earns and the amount it pays out.

Games Workshop has neither – its payouts have fluctuated over the past five years and it has returned almost all of its net income to shareholders. However, it was still a high dividend stock.

Games Workshop EPS vs dividend per share in 2020-2025

Created in TradingView

As of 2020, the company’s dividend totals approximately 23% of its market capitalization. And while the growth hasn’t been steady and consistent, it has been significant over time.

The lesson for investors is that dividend stocks are about more than just track records and payout ratios. The most vital thing is the quality of the business, and this is what makes Games Workshop stand out.

Perspectives

Games Workshop’s latest trading update reports mighty growth across the board. Although currency exchange rates influence the reported data, the situation is heading in the right direction.

The company does not expect a direct boost in costs as a result of the boost in the National Living Wage, but warned that suppliers may boost prices as a result. This is a potential risk in the future.

There is also uncertainty about U.S. tariffs as the recent administration takes over at the end of this month. As a result, management has postponed issuing guidance for the next six months.

Even if costs boost, I don’t expect inflation to reach 2022-2023 levels. And seeing how Games Workshop has performed brilliantly over this period, I expect something similar if costs boost in 2025.

A model business

I have Games Workshop shares in my portfolio. And while I look at many companies from a purchasing standpoint, few companies are as mighty as this one.

It is not unreasonable for the share price to fall on uncertainty over the prospect of higher costs. But the next time I want to invest, this will be on my list of stocks to consider.