Grupo Empresarial San José (BME:GSJ) shareholder returns have been , earning 22% in 5 years

By
Simply Wall St
Published
December 01, 2021
BME:GSJ
Source: Shutterstock

It hasn't been the best quarter for Grupo Empresarial San José, S.A. (BME:GSJ) shareholders, since the share price has fallen 17% in that time. While that's not great, the returns over five years have been decent. It's good to see the share price is up 18% in that time, better than its market return of 17%.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Check out our latest analysis for Grupo Empresarial San José

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.

During the five years of share price growth, Grupo Empresarial San José moved from a loss to profitability. That's generally thought to be a genuine positive, so we would expect to see an increasing share price.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
BME:GSJ Earnings Per Share Growth December 2nd 2021

It might be well worthwhile taking a look at our free report on Grupo Empresarial San José'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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Grupo Empresarial San José's TSR for the last 5 years was 22%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Investors in Grupo Empresarial San José had a tough year, with a total loss of 7.1% (including dividends), against a market gain of about 6.1%. 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. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. 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. For example, we've discovered 3 warning signs for Grupo Empresarial San José that you should be aware of before investing here.

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 ES exchanges.

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