B3 - Brasil Bolsa Balcão (BVMF:B3SA3) Has Rewarded Shareholders With An Exceptional 534% Total Return On Their Investment

Long term investing can be life changing when you buy and hold the truly great businesses. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held B3 S.A. - Brasil, Bolsa, Balcão (BVMF:B3SA3) shares for the last five years, while they gained 451%. And this is just one example of the epic gains achieved by some long term investors.

See our latest analysis for B3 - Brasil Bolsa Balcão

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...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During five years of share price growth, B3 - Brasil Bolsa Balcão achieved compound earnings per share (EPS) growth of 3.2% per year. This EPS growth is slower than the share price growth of 41% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that B3 - Brasil Bolsa Balcão has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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, B3 - Brasil Bolsa Balcão's TSR for the last 5 years was 534%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that B3 - Brasil Bolsa Balcão shareholders have received a total shareholder return of 34% over the last year. That's including the dividend. However, that falls short of the 45% TSR per annum it has made for shareholders, each year, over five years. Before forming an opinion on B3 - Brasil Bolsa Balcão you might want to consider these 3 valuation metrics.

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 BR 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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