The total return for Hagag Group Real Estate Entrepreneurship (TLV:HGG) investors has risen faster than earnings growth over the last five years

It's been a soft week for Hagag Group Real Estate Entrepreneurship Ltd (TLV:HGG) shares, which are down 11%. But that doesn't change the fact that shareholders have received really good returns over the last five years. In fact, the share price is 114% higher today. Generally speaking the long term returns will give you a better idea of business quality than short periods can. The more important question is whether the stock is too cheap or too expensive today.

Although Hagag Group Real Estate Entrepreneurship has shed ₪182m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for Hagag Group Real Estate Entrepreneurship

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 five years of share price growth, Hagag Group Real Estate Entrepreneurship achieved compound earnings per share (EPS) growth of 7.1% per year. This EPS growth is slower than the share price growth of 16% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.

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

It might be well worthwhile taking a look at our free report on Hagag Group Real Estate Entrepreneurship's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Hagag Group Real Estate Entrepreneurship's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Hagag Group Real Estate Entrepreneurship's TSR of 119% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

It's nice to see that Hagag Group Real Estate Entrepreneurship shareholders have received a total shareholder return of 71% over the last year. That gain is better than the annual TSR over five years, which is 17%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Hagag Group Real Estate Entrepreneurship better, we need to consider many other factors. Even so, be aware that Hagag Group Real Estate Entrepreneurship is showing 2 warning signs in our investment analysis , and 1 of those is significant...

Of course Hagag Group Real Estate Entrepreneurship 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 Israeli 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.