Pfeiffer Vacuum Technology's (ETR:PFV) earnings growth rate lags the 5.3% CAGR delivered to shareholders
While Pfeiffer Vacuum Technology AG (ETR:PFV) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 11% in the last quarter. But that doesn't change the fact that the returns over the last five years have been pleasing. Its return of 20% has certainly bested the market return! Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 15% decline over the last twelve months.
Since the long term performance has been good but there's been a recent pullback of 3.4%, let's check if the fundamentals match the share price.
Check out our latest analysis for Pfeiffer Vacuum Technology
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).
Over half a decade, Pfeiffer Vacuum Technology managed to grow its earnings per share at 5.9% a year. This EPS growth is higher than the 4% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that Pfeiffer Vacuum Technology has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Pfeiffer Vacuum Technology will grow revenue in the future.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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, Pfeiffer Vacuum Technology's TSR for the last 5 years was 30%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We regret to report that Pfeiffer Vacuum Technology shareholders are down 12% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 8.4%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Pfeiffer Vacuum Technology is showing 2 warning signs in our investment analysis , and 1 of those is significant...
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German 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.
Pfeiffer Vacuum Technology
Pfeiffer Vacuum Technology AG develops, manufactures, sells, and services vacuum pumps, components and instruments, and systems in Germany, France, rest of Europe, the United States, Republic of Korea, rest of Asia, and internationally.
Proven track record with adequate balance sheet.