Shareholders Of Clínica Baviera (BME:CBAV) Must Be Happy With Their 177% Total Return

It might be of some concern to shareholders to see the Clínica Baviera, S.A. (BME:CBAV) share price down 16% in the last month. But that scarcely detracts from the really solid long term returns generated by the company over five years. Indeed, the share price is up an impressive 142% in that time. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. Of course, that doesn't necessarily mean it's cheap now.

View our latest analysis for Clínica Baviera

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, Clínica Baviera moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What about the Total Shareholder Return (TSR)?

We've already covered Clínica Baviera'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. Dividends have been really beneficial for Clínica Baviera shareholders, and that cash payout contributed to why its TSR of 177%, over the last 5 years, is better than the share price return.

A Different Perspective

While it's never nice to take a loss, Clínica Baviera shareholders can take comfort that their trailing twelve month loss of 9.9% wasn't as bad as the market loss of around 12%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 23% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand Clínica Baviera better, we need to consider many other factors. Take risks, for example - Clínica Baviera has 1 warning sign we think you should be aware of.

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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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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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