While Iberpapel Gestión, S.A. (BME:IBG) shareholders are probably generally happy, the stock hasn’t had particularly good run recently, with the share price falling 13% in the last quarter. Looking further back, the stock has generated good profits over five years. Its return of 58% has certainly bested the market return! Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 27% decline over the last twelve months.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the five years of share price growth, Iberpapel Gestión moved from a loss to profitability. That would generally be considered a positive, so we’d expect the share price to be up.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Iberpapel Gestión’s earnings, revenue and cash flow 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. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Iberpapel Gestión the TSR over the last 5 years was 75%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
The total return of 26% received by Iberpapel Gestión shareholders over the last year isn’t far from the market return of -25%. Longer term investors wouldn’t be so upset, since they would have made 12%, each year, over five years. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. Before forming an opinion on Iberpapel Gestión you might want to consider these 3 valuation metrics.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on ES exchanges.
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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. 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. Thank you for reading.