0.3% earnings growth over 5 years has not materialized into gains for NH Hotel Group (BME:NHH) shareholders over that period

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in NH Hotel Group, S.A. (BME:NHH), since the last five years saw the share price fall 16%. More recently, the share price has dropped a further 9.6% in a month.

After losing 3.6% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for NH Hotel Group

There is no denying that markets are sometimes efficient, but prices do not always reflect 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 five years of share price growth, NH Hotel Group moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics might give us a better handle on how its value is changing over time.

In contrast to the share price, revenue has actually increased by 5.6% a year in the five year period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We know that NH Hotel Group has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at NH Hotel Group's financial health with this free report on its balance sheet.

What About The Total Shareholder Return (TSR)?

We've already covered NH Hotel Group's share price action, but we should also mention its total shareholder return (TSR). 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. Its history of dividend payouts mean that NH Hotel Group's TSR, which was a 11% drop over the last 5 years, was not as bad as the share price return.

A Different Perspective

NH Hotel Group shareholders are up 9.0% for the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 2% endured over half a decade. So this might be a sign the business has turned its fortunes around. Before deciding if you like the current share price, check how NH Hotel Group scores on these 3 valuation metrics.

But note: NH Hotel Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.