If You Had Bought Irani Papel e Embalagem (BVMF:RANI3) Stock Three Years Ago, You Could Pocket A 168% Gain Today

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. To wit, the Irani Papel e Embalagem S.A. (BVMF:RANI3) share price has flown 168% in the last three years. Most would be happy with that. It's also good to see the share price up 26% over the last quarter. But this could be related to the strong market, which is up 19% in the last three months.

View our latest analysis for Irani Papel e Embalagem

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 three years of share price growth, Irani Papel e Embalagem moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

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

We know that Irani Papel e Embalagem has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Irani Papel e Embalagem's 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 Irani Papel e Embalagem the TSR over the last 3 years was 174%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We're pleased to report that Irani Papel e Embalagem shareholders have received a total shareholder return of 32% over one year. That's including the dividend. That gain is better than the annual TSR over five years, which is 19%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Irani Papel e Embalagem better, we need to consider many other factors. Even so, be aware that Irani Papel e Embalagem is showing 4 warning signs in our investment analysis , and 2 of those are potentially serious...

But note: Irani Papel e Embalagem may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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