Those who invested in BOC Aviation (HKG:2588) a year ago are up 35%

BOC Aviation Limited (HKG:2588) shareholders might be concerned after seeing the share price drop 11% in the last quarter. But over the last year the share price action has been satisfactory. After all, the stock has performed better than the market's return of (24%) over the last year, and is up 27%.

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

View our latest analysis for BOC Aviation

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 the last year BOC Aviation grew its earnings per share (EPS) by 62%. It's fair to say that the share price gain of 27% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about BOC Aviation as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 5.70.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that BOC Aviation has improved its bottom line lately, but is it going to grow revenue? Check if analysts think BOC Aviation will grow revenue in the future.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of BOC Aviation, it has a TSR of 35% for the last 1 year. 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

We're pleased to report that BOC Aviation shareholders have received a total shareholder return of 35% over one year. That's including the dividend. That gain is better than the annual TSR over five years, which is 0.3%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 4 warning signs for BOC Aviation (2 are a bit unpleasant) that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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