Yduqs Participações (BVMF:YDUQ3) earnings and shareholder returns have been trending downwards for the last five years, but the stock hikes 12% this past week

It is a pleasure to report that the Yduqs Participações S.A. (BVMF:YDUQ3) is up 66% in the last quarter. But over the last half decade, the stock has not performed well. In fact, the share price is down 47%, which falls well short of the return you could get by buying an index fund.

While the stock has risen 12% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

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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.

Looking back five years, both Yduqs Participações' share price and EPS declined; the latter at a rate of 8.5% per year. This reduction in EPS is less than the 12% annual reduction in the share price. This implies that the market was previously too optimistic about the stock. The low P/E ratio of 10.75 further reflects this reticence.

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

It is of course excellent to see how Yduqs Participações has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Yduqs Participações' financial health with this free report on its balance sheet.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Yduqs Participações the TSR over the last 5 years was -44%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Yduqs Participações shareholders have received a total shareholder return of 7.4% over the last year. Of course, that includes the dividend. Notably the five-year annualised TSR loss of 8% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. 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 4 warning signs we've spotted with Yduqs Participações (including 1 which doesn't sit too well with us) .

Of course Yduqs Participações may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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