Did Business Growth Power Oriental Aromatics' (NSE:OAL) Share Price Gain of 202%?

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right stock, you can make a lot more than 100%. Take, for example Oriental Aromatics Limited (NSE:OAL). Its share price is already up an impressive 202% in the last twelve months. On top of that, the share price is up 52% in about a quarter. But this could be related to the strong market, which is up 24% in the last three months. We'll need to follow Oriental Aromatics for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

See our latest analysis for Oriental Aromatics

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 the last year Oriental Aromatics grew its earnings per share (EPS) by 18%. The share price gain of 202% 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).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Oriental Aromatics' 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 Oriental Aromatics the TSR over the last year was 210%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Oriental Aromatics boasts a total shareholder return of 210% for the last year (that includes the dividends) . A substantial portion of that gain has come in the last three months, with the stock up 52% in that time. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand Oriental Aromatics better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Oriental Aromatics you should know about.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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