Nissei ASB Machine's (TSE:6284) five-year total shareholder returns outpace the underlying earnings growth

It might be of some concern to shareholders to see the Nissei ASB Machine Co., Ltd. (TSE:6284) share price down 18% in the last month. On the bright side the share price is up over the last half decade. In that time, it is up 52%, which isn't bad, but is below the market return of 59%.

Since the long term performance has been good but there's been a recent pullback of 16%, let's check if the fundamentals match the share price.

Check out our latest analysis for Nissei ASB Machine

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

During five years of share price growth, Nissei ASB Machine achieved compound earnings per share (EPS) growth of 16% per year. This EPS growth is higher than the 9% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 11.04.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Nissei ASB Machine has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Nissei ASB Machine will grow revenue in the future.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Nissei ASB Machine, it has a TSR of 70% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Nissei ASB Machine shareholders have received a total shareholder return of 16% over the last year. Of course, that includes the dividend. That's better than the annualised return of 11% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before forming an opinion on Nissei ASB Machine you might want to consider these 3 valuation metrics.

If you are like me, then you will not want to miss this free list of undervalued small caps 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 Japanese 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com