The Gulf Medical Projects Company (PJSC) (ADX:GMPC) Share Price Has Gained 78% And Shareholders Are Hoping For More

The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. For example, the Gulf Medical Projects Company (PJSC) (ADX:GMPC) share price is up 78% in the last year, clearly besting the market return of around 4.2% (not including dividends). So that should have shareholders smiling. However, the longer term returns haven't been so impressive, with the stock up just 20% in the last three years.

See our latest analysis for Gulf Medical Projects Company (PJSC)

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.

Over the last twelve months, Gulf Medical Projects Company (PJSC) actually shrank its EPS by 39%.

So we don't think that investors are paying too much attention to EPS. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

We haven't seen Gulf Medical Projects Company (PJSC) increase dividend payments yet, so the yield probably hasn't helped drive the share higher. Revenue actually dropped 4.2% over last year. Usually that correlates with a lower share price, but let's face it, the gyrations of the market are sometimes only as clear as mud.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Gulf Medical Projects Company (PJSC) stock, you should check out this FREE detailed report on its balance sheet.

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 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. As it happens, Gulf Medical Projects Company (PJSC)'s TSR for the last year was 91%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

It's good to see that Gulf Medical Projects Company (PJSC) has rewarded shareholders with a total shareholder return of 91% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 19% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Gulf Medical Projects Company (PJSC) better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Gulf Medical Projects Company (PJSC) (of which 1 is concerning!) you should know about.

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 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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