Stock Analysis

Thessaloniki Water Supply & Sewerage Co (ATH:EYAPS) Has Compensated Shareholders With A Respectable 67% Return On Their Investment

ATSE:EYAPS
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Stock pickers are generally looking for stocks that will outperform the broader market. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. For example, the Thessaloniki Water Supply & Sewerage Co S.A. (ATH:EYAPS) share price is up 29% in the last 5 years, clearly besting the market decline of around 31% (ignoring dividends).

View our latest analysis for Thessaloniki Water Supply & Sewerage Co

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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, Thessaloniki Water Supply & Sewerage Co achieved compound earnings per share (EPS) growth of 6.5% per year. The EPS growth is more impressive than the yearly share price gain of 5% over the same period. So it seems the market isn't so enthusiastic about the stock these days. The reasonably low P/E ratio of 11.42 also suggests market apprehension.

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

earnings-per-share-growth
ATSE:EYAPS Earnings Per Share Growth November 22nd 2020

Dive deeper into Thessaloniki Water Supply & Sewerage Co's key metrics by checking this interactive graph of Thessaloniki Water Supply & Sewerage Co's earnings, revenue and cash flow.

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 Thessaloniki Water Supply & Sewerage Co, it has a TSR of 67% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

While it's certainly disappointing to see that Thessaloniki Water Supply & Sewerage Co shares lost 12% throughout the year, that wasn't as bad as the market loss of 19%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 11% 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 Thessaloniki Water Supply & Sewerage Co better, we need to consider many other factors. For example, we've discovered 1 warning sign for Thessaloniki Water Supply & Sewerage Co that you should be aware of before investing here.

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 GR 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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