Investors in COSCO SHIPPING Holdings (HKG:1919) have seen incredible returns of 836% over the past five years

While COSCO SHIPPING Holdings Co., Ltd. (HKG:1919) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 21% in the last quarter. But that doesn't undermine the fantastic longer term performance (measured over five years). Indeed, the share price is up a whopping 400% in that time. So it might be that some shareholders are taking profits after good performance. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price.

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.

See our latest analysis for COSCO SHIPPING Holdings

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 five years of share price growth, COSCO SHIPPING Holdings achieved compound earnings per share (EPS) growth of 64% per year. The EPS growth is more impressive than the yearly share price gain of 38% over the same period. So one could conclude that the broader market has become more cautious towards the stock. This cautious sentiment is reflected in its (fairly low) P/E ratio of 6.68.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on COSCO SHIPPING Holdings' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of COSCO SHIPPING Holdings, it has a TSR of 836% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that COSCO SHIPPING Holdings shareholders have received a total shareholder return of 56% over the last year. That's including the dividend. However, the TSR over five years, coming in at 56% per year, is even more impressive. It's always interesting to track share price performance over the longer term. But to understand COSCO SHIPPING Holdings better, we need to consider many other factors. For example, we've discovered 3 warning signs for COSCO SHIPPING Holdings (1 is potentially serious!) that you should be aware of before investing here.

Of course COSCO SHIPPING Holdings 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.