Shareholders Of Korea Investment Holdings (KRX:071050) Must Be Happy With Their 134% Total Return

When you buy a stock there is always a possibility that it could drop 100%. But on a lighter note, a good company can see its share price rise well over 100%. For example, the Korea Investment Holdings Co., Ltd. (KRX:071050) share price has soared 101% in the last half decade. Most would be very happy with that. In the last week shares have slid back 4.1%.

Check out our latest analysis for Korea Investment Holdings

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During five years of share price growth, Korea Investment Holdings achieved compound earnings per share (EPS) growth of 11% per year. This EPS growth is lower than the 15% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

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

We know that Korea Investment Holdings has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Korea Investment Holdings 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 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 Korea Investment Holdings, it has a TSR of 134% 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

Korea Investment Holdings shareholders gained a total return of 39% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 18% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. Importantly, we haven't analysed Korea Investment Holdings' dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.

Of course Korea Investment Holdings 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 KR 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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