Did Business Growth Power Entegris’s (NASDAQ:ENTG) Share Price Gain of 287%?

When you buy shares in a company, it’s worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, you can make far more than 100% on a really good stock. One great example is Entegris, Inc. (NASDAQ:ENTG) which saw its share price drive 287% higher over five years. It’s also good to see the share price up 32% over the last quarter.

See our latest analysis for Entegris

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

During five years of share price growth, Entegris achieved compound earnings per share (EPS) growth of 50% per year. This EPS growth is higher than the 31% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock.

NasdaqGS:ENTG Past and Future Earnings, September 16th 2019
NasdaqGS:ENTG Past and Future Earnings, September 16th 2019

We know that Entegris has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Entegris’s balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Entegris, it has a TSR of 294% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

It’s good to see that Entegris has rewarded shareholders with a total shareholder return of 55% in the last twelve months. That’s including the dividend. That’s better than the annualised return of 32% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. If you would like to research Entegris in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

But note: Entegris may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.