Investors in Banco Bilbao Vizcaya Argentaria (BME:BBVA) have seen stellar returns of 135% over the past five years

It hasn't been the best quarter for Banco Bilbao Vizcaya Argentaria, S.A. (BME:BBVA) shareholders, since the share price has fallen 15% in that time. On the bright side the returns have been quite good over the last half decade. Its return of 87% has certainly bested the market return!

So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns.

Check out our latest analysis for Banco Bilbao Vizcaya Argentaria

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, Banco Bilbao Vizcaya Argentaria managed to grow its earnings per share at 14% a year. That makes the EPS growth particularly close to the yearly share price growth of 13%. This indicates that investor sentiment towards the company has not changed a great deal. In fact, the share price seems to largely reflect the EPS growth.

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

We know that Banco Bilbao Vizcaya Argentaria has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Banco Bilbao Vizcaya Argentaria the TSR over the last 5 years was 135%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's good to see that Banco Bilbao Vizcaya Argentaria has rewarded shareholders with a total shareholder return of 45% in the last twelve months. That's including the dividend. That's better than the annualised return of 19% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Banco Bilbao Vizcaya Argentaria better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Banco Bilbao Vizcaya Argentaria you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com