The three-year underlying earnings growth at Beijing Enlight Media (SZSE:300251) is promising, but the shareholders are still in the red over that time

No-one enjoys it when they lose money on a stock. But it can difficult to make money in a declining market. While the Beijing Enlight Media Co., Ltd. (SZSE:300251) share price is down 20% in the last three years, the total return to shareholders (which includes dividends) was -17%. That's better than the market which declined 25% over the last three years. It's down 21% in about a quarter.

If the past week is anything to go by, investor sentiment for Beijing Enlight Media isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Beijing Enlight Media

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Beijing Enlight Media became profitable within the last five years. We would usually expect to see the share price rise as a result. So given the share price is down it's worth checking some other metrics too.

The modest 0.8% dividend yield is unlikely to be guiding the market view of the stock. With revenue flat over three years, it seems unlikely that the share price is reflecting the top line. We're not entirely sure why the share price is dropped, but it does seem likely investors have become less optimistic about the business.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Beijing Enlight Media is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Beijing Enlight Media stock, you should check out this free report showing analyst consensus estimates for future profits.

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. We note that for Beijing Enlight Media the TSR over the last 3 years was -17%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Beijing Enlight Media shareholders have received a total shareholder return of 4.8% over the last year. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4% per year), it would seem that the stock's performance has improved in recent times. 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 Beijing Enlight Media better, we need to consider many other factors. For instance, we've identified 1 warning sign for Beijing Enlight Media that you should be aware of.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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