The three-year shareholder returns and company earnings persist lower as Weifu High-Technology Group (SZSE:000581) stock falls a further 3.6% in past week

No-one enjoys it when they lose money on a stock. But it can difficult to make money in a declining market. The Weifu High-Technology Group Co., Ltd. (SZSE:000581) is down 25% over three years, but the total shareholder return is -12% once you include the dividend. That's better than the market which declined 19% over the last three years.

If the past week is anything to go by, investor sentiment for Weifu High-Technology Group isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Weifu High-Technology Group

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

Weifu High-Technology Group saw its EPS decline at a compound rate of 12% per year, over the last three years. In comparison the 9% compound annual share price decline isn't as bad as the EPS drop-off. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Weifu High-Technology Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Weifu High-Technology Group will grow revenue in the future.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Weifu High-Technology Group the TSR over the last 3 years was -12%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's good to see that Weifu High-Technology Group has rewarded shareholders with a total shareholder return of 19% in the last twelve months. Of course, that includes the dividend. That gain is better than the annual TSR over five years, which is 2%. 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. 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. To that end, you should be aware of the 1 warning sign we've spotted with Weifu High-Technology Group .

But note: Weifu High-Technology Group 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 Chinese exchanges.

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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.