Would Shareholders Who Purchased Empresas Lipigas' (SNSE:LIPIGAS) Stock Three Years Be Happy With The Share price Today?

Empresas Lipigas S.A. (SNSE:LIPIGAS) shareholders should be happy to see the share price up 13% in the last month. It's not great that the stock is down over the last three years. But on the bright side, its return of -21%, is better than the market, which is down 18%.

Check out our latest analysis for Empresas Lipigas

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 three years that the share price fell, Empresas Lipigas' earnings per share (EPS) dropped by 6.6% each year. This change in EPS is reasonably close to the 8% average annual decrease in the share price. So it seems like sentiment towards the stock hasn't changed all that much over time. Rather, the share price has approximately tracked EPS growth.

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

It might be well worthwhile taking a look at our free report on Empresas Lipigas' earnings, revenue and cash flow.

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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Empresas Lipigas the TSR over the last 3 years was -6.7%, 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 Empresas Lipigas shareholders have gained 2.0% (in total) over the last year. And yes, that does include the dividend. What is absolutely clear is that is far preferable to the dismal 2.2% average annual loss suffered over the last three years. It could well be that the business has turned around -- or else regained the confidence of investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Empresas Lipigas , and understanding them should be part of your investment process.

But note: Empresas Lipigas 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 CL 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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