Sunflag Iron and Steel's (NSE:SUNFLAG) five-year earnings growth trails the 50% YoY shareholder returns

Buying shares in the best businesses can build meaningful wealth for you and your family. While not every stock performs well, when investors win, they can win big. To wit, the Sunflag Iron and Steel Company Limited (NSE:SUNFLAG) share price has soared 669% over five years. This just goes to show the value creation that some businesses can achieve. It's also good to see the share price up 29% over the last quarter. We love happy stories like this one. The company should be really proud of that performance!

The past week has proven to be lucrative for Sunflag Iron and Steel investors, so let's see if fundamentals drove the company's five-year performance.

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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...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During five years of share price growth, Sunflag Iron and Steel achieved compound earnings per share (EPS) growth of 12% per year. This EPS growth is slower than the share price growth of 50% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. 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 Sunflag Iron and Steel's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Sunflag Iron and Steel shareholders have received a total shareholder return of 43% over one year. Of course, that includes the dividend. However, that falls short of the 50% TSR per annum it has made for shareholders, each year, over five years. Before forming an opinion on Sunflag Iron and Steel you might want to consider these 3 valuation metrics.

Of course Sunflag Iron and Steel 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 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.