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China Rare Earth Resources And Technology (SZSE:000831) shareholder returns have been strong, earning 157% in 5 years
When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. Long term China Rare Earth Resources And Technology Co., Ltd. (SZSE:000831) shareholders would be well aware of this, since the stock is up 154% in five years. It's also good to see the share price up 12% over the last quarter.
The past week has proven to be lucrative for China Rare Earth Resources And Technology investors, so let's see if fundamentals drove the company's five-year performance.
See our latest analysis for China Rare Earth Resources And Technology
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).
During five years of share price growth, China Rare Earth Resources And Technology achieved compound earnings per share (EPS) growth of 11% per year. We note, however, that extraordinary items have impacted earnings. This EPS growth is slower than the share price growth of 21% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on China Rare Earth Resources And Technology's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
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 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, China Rare Earth Resources And Technology's TSR for the last 5 years was 157%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
We're pleased to report that China Rare Earth Resources And Technology shareholders have received a total shareholder return of 18% over one year. Of course, that includes the dividend. However, the TSR over five years, coming in at 21% per year, is even more impressive. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
But note: China Rare Earth Resources And Technology 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.
About SZSE:000831
China Rare Earth Resources And Technology
China Rare Earth Resources And Technology Co., Ltd.
Excellent balance sheet with weak fundamentals.