Samsung Heavy Industries (KRX:010140) shareholder returns have been solid, earning 286% in 5 years

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, you can make far more than 100% on a really good stock. One great example is Samsung Heavy Industries Co., Ltd. (KRX:010140) which saw its share price drive 264% higher over five years. On top of that, the share price is up 17% in about a quarter.

Since it's been a strong week for Samsung Heavy Industries shareholders, let's have a look at trend of the longer term fundamentals.

We've discovered 1 warning sign about Samsung Heavy Industries. View them for free.

Given that Samsung Heavy Industries only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last 5 years Samsung Heavy Industries saw its revenue grow at 5.2% per year. Put simply, that growth rate fails to impress. So we wouldn't have expected to see the share price to have lifted 29% for each year during that time, but that's what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It may be that the market is pretty optimistic about Samsung Heavy Industries.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Samsung Heavy Industries is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Samsung Heavy Industries' total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Samsung Heavy Industries hasn't been paying dividends, but its TSR of 286% exceeds its share price return of 264%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

It's good to see that Samsung Heavy Industries has rewarded shareholders with a total shareholder return of 58% in the last twelve months. That's better than the annualised return of 31% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 1 warning sign for Samsung Heavy Industries that you should be aware of before investing here.

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 South Korean 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.