If You Had Bought EnBW Energie Baden-Württemberg (ETR:EBK) Shares Five Years Ago You'd Have Earned 134% Returns

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on a lighter note, a good company can see its share price rise well over 100%. One great example is EnBW Energie Baden-Württemberg AG (ETR:EBK) which saw its share price drive 134% higher over five years. Meanwhile the share price is 1.9% higher than it was a week ago.

View our latest analysis for EnBW Energie Baden-Württemberg

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

During the five years of share price growth, EnBW Energie Baden-Württemberg moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

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

Dive deeper into EnBW Energie Baden-Württemberg's key metrics by checking this interactive graph of EnBW Energie Baden-Württemberg's earnings, revenue and cash flow.

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 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for EnBW Energie Baden-Württemberg the TSR over the last 5 years was 152%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that EnBW Energie Baden-Württemberg shareholders have received a total shareholder return of 15% over one year. Of course, that includes the dividend. However, the TSR over five years, coming in at 20% per year, is even more impressive. 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. Take risks, for example - EnBW Energie Baden-Württemberg has 2 warning signs (and 1 which is concerning) we think you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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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. 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.
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