GuiZhouYongJi PrintingLtd's (SHSE:603058) five-year earnings growth trails the 13% YoY shareholder returns

When we invest, we're generally looking for stocks that outperform the market average. And the truth is, you can make significant gains if you buy good quality businesses at the right price. For example, the GuiZhouYongJi Printing Co.,Ltd (SHSE:603058) share price is up 64% in the last 5 years, clearly besting the market return of around 18% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 26%, including dividends.

Since it's been a strong week for GuiZhouYongJi PrintingLtd shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for GuiZhouYongJi PrintingLtd

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. 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, GuiZhouYongJi PrintingLtd managed to grow its earnings per share at 9.0% a year. So the EPS growth rate is rather close to the annualized share price gain of 10% per year. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. In fact, the share price seems to largely reflect the EPS growth.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into GuiZhouYongJi PrintingLtd's key metrics by checking this interactive graph of GuiZhouYongJi PrintingLtd's earnings, revenue and cash flow.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of GuiZhouYongJi PrintingLtd, it has a TSR of 88% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

We're pleased to report that GuiZhouYongJi PrintingLtd shareholders have received a total shareholder return of 26% over one year. That's including the dividend. That's better than the annualised return of 13% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand GuiZhouYongJi PrintingLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for GuiZhouYongJi PrintingLtd (1 doesn't sit too well with us) that you should be aware of.

We will like GuiZhouYongJi PrintingLtd 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.