Investors in Ping An Insurance (Group) Company of China (SHSE:601318) have unfortunately lost 22% over the last five years

While not a mind-blowing move, it is good to see that the Ping An Insurance (Group) Company of China, Ltd. (SHSE:601318) share price has gained 21% in the last three months. But over the last half decade, the stock has not performed well. In fact, the share price is down 37%, which falls well short of the return you could get by buying an index fund.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.

View our latest analysis for Ping An Insurance (Group) Company of China

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. 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).

Looking back five years, both Ping An Insurance (Group) Company of China's share price and EPS declined; the latter at a rate of 6.1% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 9% per year, over the period. This implies that the market is more cautious about the business these days. The less favorable sentiment is reflected in its current P/E ratio of 8.22.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that Ping An Insurance (Group) Company of China has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Ping An Insurance (Group) Company of China, it has a TSR of -22% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We're pleased to report that Ping An Insurance (Group) Company of China shareholders have received a total shareholder return of 37% over one year. That's including the dividend. That certainly beats the loss of about 4% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. Importantly, we haven't analysed Ping An Insurance (Group) Company of China's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.

We will like Ping An Insurance (Group) Company of China better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.