Can You Imagine How Indian Energy Exchange's (NSE:IEX) Shareholders Feel About The 53% Share Price Increase?

Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. For example, the Indian Energy Exchange Limited (NSE:IEX) share price is up 53% in the last year, clearly besting the market return of around 16% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! And shareholders have also done well over the long term, with an increase of 33% in the last three years.

See our latest analysis for Indian Energy Exchange

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).

Indian Energy Exchange was able to grow EPS by 3.6% in the last twelve months. The share price gain of 53% certainly outpaced the EPS growth. So it's fair to assume the market has a higher opinion of the business than it a year ago.

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 Indian Energy Exchange's 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Indian Energy Exchange the TSR over the last year was 56%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that Indian Energy Exchange shareholders have gained 56% (in total) over the last year. That's including the dividend. So this year's TSR was actually better than the three-year TSR (annualized) of 11%. Given the track record of solid returns over varying time frames, it might be worth putting Indian Energy Exchange on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Indian Energy Exchange better, we need to consider many other factors. Even so, be aware that Indian Energy Exchange is showing 2 warning signs in our investment analysis , you should know about...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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