CSSC Offshore & Marine Engineering (Group)'s (HKG:317) investors will be pleased with their splendid 147% return over the last three years
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For instance the CSSC Offshore & Marine Engineering (Group) Company Limited (HKG:317) share price is 143% higher than it was three years ago. How nice for those who held the stock! On top of that, the share price is up 16% in about a quarter. But this could be related to the strong market, which is up 9.6% in the last three months.
So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 three years of share price growth, CSSC Offshore & Marine Engineering (Group) achieved compound earnings per share growth of 58% per year. This EPS growth is higher than the 35% average annual increase in the share price. So it seems investors have become more cautious about the company, over time.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that CSSC Offshore & Marine Engineering (Group) has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at CSSC Offshore & Marine Engineering (Group)'s financial health with this free report on its balance sheet.
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. We note that for CSSC Offshore & Marine Engineering (Group) the TSR over the last 3 years was 147%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
CSSC Offshore & Marine Engineering (Group) shareholders are up 13% for the year (even including dividends). But that was short of the market average. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 14% over five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. Before deciding if you like the current share price, check how CSSC Offshore & Marine Engineering (Group) scores on these 3 valuation metrics.
Of course CSSC Offshore & Marine Engineering (Group) may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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.
About SEHK:317
CSSC Offshore & Marine Engineering (Group)
Manufactures and sells marine and defense equipment in the People’s Republic of China, other regions in Asia, Europe, Oceania, North America, South America, and Africa.
Excellent balance sheet with reasonable growth potential.
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