Update: India Grid Trust (NSE:INDIGRID) Stock Gained 15% In The Last Year

Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. To wit, the India Grid Trust (NSE:INDIGRID) share price is 15% higher than it was a year ago, much better than the market return of around 2.4% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! India Grid Trust hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for India Grid Trust

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

India Grid Trust was able to grow EPS by 6.0% in the last twelve months. This EPS growth is significantly lower than the 15% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it a year ago.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on India Grid Trust'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. 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. We note that for India Grid Trust the TSR over the last year was 30%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

India Grid Trust boasts a total shareholder return of 30% for the last year (that includes the dividends) . The more recent returns haven't been as impressive as the longer term returns, coming in at just 2.5%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). It's always interesting to track share price performance over the longer term. But to understand India Grid Trust better, we need to consider many other factors. For example, we've discovered 4 warning signs for India Grid Trust (3 are a bit unpleasant!) that you should be aware of before investing here.

We will like India Grid Trust better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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