Is Kulmbacher Brauerei Aktien-Gesellschaft’s (MUN:KUL) 114% Share Price Increase Well Justified?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of Kulmbacher Brauerei Aktien-Gesellschaft (MUN:KUL) stock is up an impressive 114% over the last five years. In the last week the share price is up 2.2%.

View our latest analysis for Kulmbacher Brauerei Aktien-Gesellschaft

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, Kulmbacher Brauerei Aktien-Gesellschaft managed to grow its earnings per share at 25% a year. The EPS growth is more impressive than the yearly share price gain of 16% over the same period. So one could conclude that the broader market has become more cautious towards the stock.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

MUN:KUL Past and Future Earnings, June 19th 2019
MUN:KUL Past and Future Earnings, June 19th 2019

It might be well worthwhile taking a look at our free report on Kulmbacher Brauerei Aktien-Gesellschaft’s earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Kulmbacher Brauerei Aktien-Gesellschaft, it has a TSR of 129% for the last 5 years. That exceeds its share price return that we previously mentioned. And there’s no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It’s good to see that Kulmbacher Brauerei Aktien-Gesellschaft has rewarded shareholders with a total shareholder return of 16% in the last twelve months. That’s including the dividend. However, that falls short of the 18% TSR per annum it has made for shareholders, each year, over five years. Before deciding if you like the current share price, check how Kulmbacher Brauerei Aktien-Gesellschaft scores on these 3 valuation metrics.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.