Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France's (EPA:CAF) earnings have declined over five years, contributing to shareholders 21% loss

The main aim of stock picking is to find the market-beating stocks. But in any portfolio, there will be mixed results between individual stocks. So we wouldn't blame long term Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France (EPA:CAF) shareholders for doubting their decision to hold, with the stock down 36% over a half decade.

While the last five years has been tough for Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

View our latest analysis for Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France

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 the five years over which the share price declined, Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France's earnings per share (EPS) dropped by 2.5% each year. Readers should note that the share price has fallen faster than the EPS, at a rate of 9% per year, over the period. This implies that the market is more cautious about the business these days. The low P/E ratio of 7.51 further reflects this reticence.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France the TSR over the last 5 years was -21%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Investors in Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France had a tough year, with a total loss of 3.6% (including dividends), against a market gain of about 4.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, longer term shareholders are suffering worse, given the loss of 4% doled out over the last five years. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. Importantly, we haven't analysed Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.

But note: Caisse Régionale de Crédit Agricole Mutuel de Paris et d'Ile-de-France 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 French 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.