Jiangsu Yuyue Medical Equipment & Supply (SZSE:002223) sheds 3.9% this week, as yearly returns fall more in line with earnings growth

It might be of some concern to shareholders to see the Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. (SZSE:002223) share price down 10% in the last month. Looking further back, the stock has generated good profits over five years. After all, the share price is up a market-beating 61% in that time.

While this past week has detracted from the company's five-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

View our latest analysis for Jiangsu Yuyue Medical Equipment & Supply

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. 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.

Over half a decade, Jiangsu Yuyue Medical Equipment & Supply managed to grow its earnings per share at 25% a year. The EPS growth is more impressive than the yearly share price gain of 10% over the same period. So one could conclude that the broader market has become more cautious towards the stock.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that Jiangsu Yuyue Medical Equipment & Supply has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Jiangsu Yuyue Medical Equipment & Supply 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. As it happens, Jiangsu Yuyue Medical Equipment & Supply's TSR for the last 5 years was 73%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's good to see that Jiangsu Yuyue Medical Equipment & Supply has rewarded shareholders with a total shareholder return of 5.1% in the last twelve months. Of course, that includes the dividend. However, that falls short of the 12% 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. 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 instance, we've identified 2 warning signs for Jiangsu Yuyue Medical Equipment & Supply that you should be aware of.

Of course Jiangsu Yuyue Medical Equipment & Supply may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.

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