Dhampur Sugar Mills (NSE:DHAMPURSUG) shareholders notch a 32% CAGR over 3 years, yet earnings have been shrinking

While Dhampur Sugar Mills Limited (NSE:DHAMPURSUG) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 15% in the last quarter. In contrast the stock is up over the last three years. In that time, it is up 22%, which isn't bad, but not amazing either.

Since it's been a strong week for Dhampur Sugar Mills shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Dhampur Sugar Mills

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over the last three years, Dhampur Sugar Mills failed to grow earnings per share, which fell 16% (annualized).

Thus, it seems unlikely that the market is focussed on EPS growth 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.

The revenue drop of 17% is as underwhelming as some politicians. The only thing that's clear is there is low correlation between Dhampur Sugar Mills' share price and its historic fundamental data. Further research may be required!

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We know that Dhampur Sugar Mills has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling Dhampur Sugar Mills stock, you should check out this free report showing analyst profit forecasts.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Dhampur Sugar Mills the TSR over the last 3 years was 128%, 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

Dhampur Sugar Mills shareholders gained a total return of 0.6% during the year. But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 16% per year for five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. It's always interesting to track share price performance over the longer term. But to understand Dhampur Sugar Mills better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Dhampur Sugar Mills (of which 1 is a bit concerning!) you should know about.

We will like Dhampur Sugar Mills better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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