The 75% return delivered to Kingboard Laminates Holdings' (HKG:1888) shareholders actually lagged YoY earnings growth

Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Kingboard Laminates Holdings Limited (HKG:1888) share price is 70% higher than it was a year ago, much better than the market return of around 24% (not including dividends) in the same period. So that should have shareholders smiling. Unfortunately the longer term returns are not so good, with the stock falling 40% in the last three years.

Since it's been a strong week for Kingboard Laminates Holdings shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for Kingboard Laminates Holdings

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year Kingboard Laminates Holdings grew its earnings per share (EPS) by 140%. It's fair to say that the share price gain of 70% did not keep pace with the EPS growth. So it seems like the market has cooled on Kingboard Laminates Holdings, despite the growth. Interesting.

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

We know that Kingboard Laminates Holdings has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Kingboard Laminates Holdings' TSR for the last 1 year was 75%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that Kingboard Laminates Holdings shareholders have received a total shareholder return of 75% over the last year. That's including the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 9% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before deciding if you like the current share price, check how Kingboard Laminates Holdings scores on these 3 valuation metrics.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.