Earnings growth of 0.1% over 5 years hasn't been enough to translate into positive returns for Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative (EPA:CNDF) shareholders

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But the main game is to find enough winners to more than offset the losers At this point some shareholders may be questioning their investment in Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative (EPA:CNDF), since the last five years saw the share price fall 58%. Furthermore, it's down 18% in about a quarter. That's not much fun for holders.

Since Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative has shed €49m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 unfortunate half decade during which the share price slipped, Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative actually saw its earnings per share (EPS) improve by 0.6% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Or possibly, the market was previously very optimistic, so the stock has disappointed, despite improving EPS.

Based on these numbers, we'd venture that the market may have been over-optimistic about forecast growth, half a decade ago. Having said that, we might get a better idea of what's going on with the stock by looking at other metrics.

We note that the dividend has fallen in the last five years, so that may have contributed to the share price decline.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

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. In the case of Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative, it has a TSR of -46% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While the broader market gained around 1.6% in the last year, Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative shareholders lost 7.4% (even including dividends). 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 8% 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. It's always interesting to track share price performance over the longer term. But to understand Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative better, we need to consider many other factors. Even so, be aware that Caisse Régionale de Crédit Agricole Mutuel Nord de France Société coopérative is showing 1 warning sign in our investment analysis , you should know about...

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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 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.