Recent 5.3% pullback isn't enough to hurt long-term D'Ieteren Group (EBR:DIE) shareholders, they're still up 259% over 5 years

While D'Ieteren Group SA (EBR:DIE) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 22% in the last quarter. But in stark contrast, the returns over the last half decade have impressed. It's fair to say most would be happy with 153% the gain in that time. To some, the recent pullback wouldn't be surprising after such a fast rise. Of course, that doesn't necessarily mean it's cheap now.

Since the long term performance has been good but there's been a recent pullback of 5.3%, let's check if the fundamentals match the share price.

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In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 last half decade, D'Ieteren Group became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. In fact, the D'Ieteren Group stock price is 19% lower in the last three years. Meanwhile, EPS is up 22% per year. So there seems to be a mismatch between the positive EPS growth and the change in the share price, which is down -7% per year.

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

We know that D'Ieteren Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think D'Ieteren Group will grow revenue in the future.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for D'Ieteren Group the TSR over the last 5 years was 259%, 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

D'Ieteren Group provided a TSR of 2.6% over the last twelve months. But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 29% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 2 warning signs we've spotted with D'Ieteren Group (including 1 which doesn't sit too well with us) .

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