Tata Metaliks (NSE:TATAMETALI) Has Rewarded Shareholders With An Exceptional 806% Total Return On Their Investment

Tata Metaliks Limited (NSE:TATAMETALI) shareholders have seen the share price descend 11% over the month. But that does not change the realty that the stock's performance has been terrific, over five years. Indeed, the share price is up a whopping 784% in that time. So we don't think the recent decline in the share price means its story is a sad one. Only time will tell if there is still too much optimism currently reflected in the share price.

Anyone who held for that rewarding ride would probably be keen to talk about it.

Check out our latest analysis for Tata Metaliks

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.

Over half a decade, Tata Metaliks managed to grow its earnings per share at 13% a year. This EPS growth is lower than the 55% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

This free interactive report on Tata Metaliks' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Tata Metaliks, it has a TSR of 806% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's good to see that Tata Metaliks has rewarded shareholders with a total shareholder return of 30% in the last twelve months. That's including the dividend. Having said that, the five-year TSR of 55% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. It's always interesting to track share price performance over the longer term. But to understand Tata Metaliks better, we need to consider many other factors. Take risks, for example - Tata Metaliks has 2 warning signs we think you should be aware of.

But note: Tata Metaliks may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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