HIAG Immobilien Holding's (VTX:HIAG) underlying earnings growth outpaced the decent return generated for shareholders over the past year

If you want to compound wealth in the stock market, you can do so by buying an index fund. But if you pick the right individual stocks, you could make more than that. To wit, the HIAG Immobilien Holding AG (VTX:HIAG) share price is 41% higher than it was a year ago, much better than the market decline of around 0.2% (not including dividends) in the same period. So that should have shareholders smiling. The longer term returns have not been as good, with the stock price only 26% higher than it was three years ago.

Although HIAG Immobilien Holding has shed CHF44m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

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. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year HIAG Immobilien Holding grew its earnings per share (EPS) by 60%. This EPS growth is significantly higher than the 41% increase in the share price. Therefore, it seems the market isn't as excited about HIAG Immobilien Holding as it was before. This could be an opportunity.

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

We know that HIAG Immobilien Holding has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of HIAG Immobilien Holding, it has a TSR of 46% for the last 1 year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

It's good to see that HIAG Immobilien Holding has rewarded shareholders with a total shareholder return of 46% in the last twelve months. That's including the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 8% per year), it would seem that the stock's performance has improved in recent times. 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 HIAG Immobilien Holding better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for HIAG Immobilien Holding (of which 2 are significant!) you should know about.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.