Would Shareholders Who Purchased Compañía Chilena de Fósforos' (SNSE:FOSFOROS) Stock Three Years Be Happy With The Share price Today?

No-one enjoys it when they lose money on a stock. But it can difficult to make money in a declining market. While the Compañía Chilena de Fósforos S.A. (SNSE:FOSFOROS) share price is down 17% in the last three years, the total return to shareholders (which includes dividends) was 0.9%. That's better than the market which declined 20% over the last three years.

View our latest analysis for Compañía Chilena de Fósforos

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 the unfortunate three years of share price decline, Compañía Chilena de Fósforos actually saw its earnings per share (EPS) improve by 8.7% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Alternatively, growth expectations may have been unreasonable in the past.

It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

Revenue is actually up 3.3% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Compañía Chilena de Fósforos further; while we may be missing something on this analysis, there might also be an opportunity.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Compañía Chilena de Fósforos stock, you should check out this FREE detailed report on its balance sheet.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Compañía Chilena de Fósforos the TSR over the last 3 years was 0.9%, 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 Compañía Chilena de Fósforos shareholders have received a total shareholder return of 0.6% over the last year. Of course, that includes the dividend. However, that falls short of the 6% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. It's always interesting to track share price performance over the longer term. But to understand Compañía Chilena de Fósforos better, we need to consider many other factors. Even so, be aware that Compañía Chilena de Fósforos is showing 4 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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