Reflecting on Takahashi Curtain Wall's (TYO:1994) Share Price Returns Over The Last Three Years

While not a mind-blowing move, it is good to see that the Takahashi Curtain Wall Corporation (TYO:1994) share price has gained 19% in the last three months. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 30% in the last three years, falling well short of the market return.

Check out our latest analysis for Takahashi Curtain Wall

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Takahashi Curtain Wall saw its EPS decline at a compound rate of 13% per year, over the last three years. This change in EPS is reasonably close to the 11% average annual decrease in the share price. That suggests that the market sentiment around the company hasn't changed much over that time, despite the disappointment. It seems like the share price is reflecting the declining earnings per share.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Takahashi Curtain Wall's key metrics by checking this interactive graph of Takahashi Curtain Wall's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Takahashi Curtain Wall's TSR for the last 3 years was -21%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Takahashi Curtain Wall shareholders are up 6.8% for the year (even including dividends). But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 9% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Takahashi Curtain Wall is showing 5 warning signs in our investment analysis , and 1 of those is concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

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