Ningbo BaoSi Energy Equipment's (SZSE:300441) 439% YoY earnings expansion surpassed the shareholder returns over the past year

The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. For example, the Ningbo BaoSi Energy Equipment Co., Ltd. (SZSE:300441) share price is up 56% in the last 1 year, clearly besting the market return of around 13% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Also impressive, the stock is up 38% over three years, making long term shareholders happy, too.

Since it's been a strong week for Ningbo BaoSi Energy Equipment shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Ningbo BaoSi Energy Equipment

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Ningbo BaoSi Energy Equipment boasted truly magnificent EPS growth in the last year. This remarkable growth rate may not be sustainable, but it is still impressive. So we're unsurprised to see the share price gaining ground. We're real advocates of letting inflection points like this guide our research as stock pickers.

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

We know that Ningbo BaoSi Energy Equipment has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Ningbo BaoSi Energy Equipment's balance sheet strength is a great place to start, if you want to investigate the stock further.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Ningbo BaoSi Energy Equipment the TSR over the last 1 year was 61%, 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 Ningbo BaoSi Energy Equipment shareholders have received a total shareholder return of 61% over the last year. That's including the dividend. That gain is better than the annual TSR over five years, which is 6%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. For example, we've discovered 3 warning signs for Ningbo BaoSi Energy Equipment (2 are significant!) that you should be aware of before investing here.

But note: Ningbo BaoSi Energy Equipment 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.