Qian Jiang Water Resources DevelopmentLtd (SHSE:600283) delivers shareholders notable 8.6% CAGR over 5 years, surging 10.0% in the last week alone

When we invest, we're generally looking for stocks that outperform the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, the Qian Jiang Water Resources Development Co.,Ltd (SHSE:600283) share price is up 44% in the last 5 years, clearly besting the market return of around 16% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 2.3%, including dividends.

Since it's been a strong week for Qian Jiang Water Resources DevelopmentLtd shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Qian Jiang Water Resources DevelopmentLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

During the last half decade, Qian Jiang Water Resources DevelopmentLtd became profitable. That's generally thought to be a genuine positive, so investors may expect to see an increasing share price. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. We can see that the Qian Jiang Water Resources DevelopmentLtd share price is up 29% in the last three years. During the same period, EPS grew by 1.8% each year. This EPS growth is lower than the 9% average annual increase in the share price over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.

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

Dive deeper into Qian Jiang Water Resources DevelopmentLtd's key metrics by checking this interactive graph of Qian Jiang Water Resources DevelopmentLtd'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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Qian Jiang Water Resources DevelopmentLtd, it has a TSR of 51% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

Qian Jiang Water Resources DevelopmentLtd shareholders gained a total return of 2.3% during the year. But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 9% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Qian Jiang Water Resources DevelopmentLtd (1 is significant) that you should be aware of.

Of course Qian Jiang Water Resources DevelopmentLtd 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.