Shareholders Of Emirates Driving Company P.J.S.C (ADX:DRIVE) Must Be Happy With Their 279% Total Return

Emirates Driving Company P.J.S.C. (ADX:DRIVE) shareholders might be concerned after seeing the share price drop 11% in the last quarter. But that scarcely detracts from the really solid long term returns generated by the company over five years. Indeed, the share price is up an impressive 164% in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. The more important question is whether the stock is too cheap or too expensive today.

See our latest analysis for Emirates Driving Company P.J.S.C

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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, Emirates Driving Company P.J.S.C achieved compound earnings per share (EPS) growth of 6.4% per year. This EPS growth is lower than the 21% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into Emirates Driving Company P.J.S.C's key metrics by checking this interactive graph of Emirates Driving Company P.J.S.C's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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 Emirates Driving Company P.J.S.C the TSR over the last 5 years was 279%, 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

It's good to see that Emirates Driving Company P.J.S.C has rewarded shareholders with a total shareholder return of 21% in the last twelve months. Of course, that includes the dividend. However, the TSR over five years, coming in at 31% per year, is even more impressive. Importantly, we haven't analysed Emirates Driving Company P.J.S.C's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.

If you are like me, then you will not want to miss this free list of growing companies 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 AE 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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