King's Flair International (Holdings) (HKG:6822) Has Gifted Shareholders With A Fantastic 105% Total Return On Their Investment

By buying an index fund, you can roughly match the market return with ease. But if you pick the right individual stocks, you could make more than that. For example, King's Flair International (Holdings) Limited (HKG:6822) shareholders have seen the share price rise 34% over three years, well in excess of the market decline (6.7%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 49% , including dividends .

Check out our latest analysis for King's Flair International (Holdings)

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.

Over the last three years, King's Flair International (Holdings) failed to grow earnings per share, which fell 3.3% (annualized).

Companies are not always focussed on EPS growth in the short term, and looking at how the share price has reacted, we don't think EPS is the most important metric for King's Flair International (Holdings) at the moment. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We note that the dividend is higher than it was preciously, so that may have assisted the share price. Sometimes yield-chasing investors will flock to a company if they think the dividend can grow over time.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on King's Flair International (Holdings)'s balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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 King's Flair International (Holdings) the TSR over the last 3 years was 105%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that King's Flair International (Holdings) shareholders have received a total shareholder return of 49% over the last year. That's including the dividend. That gain is better than the annual TSR over five years, which is 19%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand King's Flair International (Holdings) better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with King's Flair International (Holdings) (including 1 which is a bit unpleasant) .

But note: King's Flair International (Holdings) may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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