Investors in Abu Dhabi Commercial Bank PJSC (ADX:ADCB) have seen respectable returns of 34% over the past three years

Investors can buy low cost index fund if they want to receive the average market return. But if you invest in individual stocks, some are likely to underperform. That's what has happened with the Abu Dhabi Commercial Bank PJSC (ADX:ADCB) share price. It's up 18% over three years, but that is below the market return. Disappointingly, the share price is down 4.1% in the last year.

So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.

Check out our latest analysis for Abu Dhabi Commercial Bank PJSC

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Abu Dhabi Commercial Bank PJSC was able to grow its EPS at 21% per year over three years, sending the share price higher. The average annual share price increase of 6% is actually lower than the EPS growth. Therefore, it seems the market has moderated its expectations for growth, somewhat. This cautious sentiment is reflected in its (fairly low) P/E ratio of 7.13.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that Abu Dhabi Commercial Bank PJSC has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Abu Dhabi Commercial Bank PJSC the TSR over the last 3 years was 34%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

We're pleased to report that Abu Dhabi Commercial Bank PJSC shareholders have received a total shareholder return of 2.5% over one year. And that does include the dividend. However, the TSR over five years, coming in at 3% per year, is even more impressive. It's always interesting to track share price performance over the longer term. But to understand Abu Dhabi Commercial Bank PJSC better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Abu Dhabi Commercial Bank PJSC you should know about.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.