Wüstenrot & Württembergische's (ETR:WUW) Stock Price Has Reduced 33% In The Past Three Years

Wüstenrot & Württembergische AG (ETR:WUW) shareholders should be happy to see the share price up 12% in the last quarter. But that doesn't change the fact that the returns over the last three years have been less than pleasing. In fact, the share price is down 33% in the last three years, falling well short of the market return.

See our latest analysis for Wüstenrot & Württembergische

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the three years that the share price fell, Wüstenrot & Württembergische's earnings per share (EPS) dropped by 9.6% each year. This reduction in EPS is slower than the 13% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. This increased caution is also evident in the rather low P/E ratio, which is sitting at 7.86.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Wüstenrot & Württembergische's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. We note that for Wüstenrot & Württembergische the TSR over the last 3 years was -25%, 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

While the broader market gained around 6.4% in the last year, Wüstenrot & Württembergische shareholders lost 9.5% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 0.6%, 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. 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. Take risks, for example - Wüstenrot & Württembergische has 1 warning sign we think you should be aware of.

Of course Wüstenrot & Württembergische 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 DE exchanges.

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