Électricite de Strasbourg Société Anonyme (EPA:ELEC) Has Compensated Shareholders With A Respectable 53% Return On Their Investment

If you buy and hold a stock for many years, you'd hope to be making a profit. Better yet, you'd like to see the share price move up more than the market average. But Électricite de Strasbourg Société Anonyme (EPA:ELEC) has fallen short of that second goal, with a share price rise of 19% over five years, which is below the market return. But if you include dividends then the return is market-beating. Zooming in, the stock is up just 2.1% in the last year.

View our latest analysis for Électricite de Strasbourg Société Anonyme

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...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During five years of share price growth, Électricite de Strasbourg Société Anonyme actually saw its EPS drop 2.1% per year.

With EPS falling, but a modestly increasing share price, it seems that the market was probably too pessimistic about the stock in the past. Having said that, if the EPS falls continue we'd be surprised to see a sustained increase in share price.

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

It's probably worth noting that the CEO is paid less than the median at similar sized 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 Électricite de Strasbourg Société Anonyme's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Électricite de Strasbourg Société Anonyme the TSR over the last 5 years was 53%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's good to see that Électricite de Strasbourg Société Anonyme has rewarded shareholders with a total shareholder return of 7.5% in the last twelve months. That's including the dividend. However, that falls short of the 9% TSR per annum it has made for shareholders, each year, over five years. It's always interesting to track share price performance over the longer term. But to understand Électricite de Strasbourg Société Anonyme better, we need to consider many other factors. Even so, be aware that Électricite de Strasbourg Société Anonyme is showing 1 warning sign in our investment analysis , you should know about...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FR exchanges.

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