Those who invested in Kyungdong Invest (KRX:012320) three years ago are up 88%

Kyungdong Invest Co., Ltd (KRX:012320) shareholders might be concerned after seeing the share price drop 25% in the last quarter. But don't let that distract from the very nice return generated over three years. After all, the share price is up a market-beating 81% in that time.

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

View our latest analysis for Kyungdong Invest

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.

Over the last three years, Kyungdong Invest failed to grow earnings per share, which fell 1.4% (annualized).

Given the share price resilience, we don't think the (declining) EPS numbers are a good measure of how the business is moving forward, right now. So other metrics may hold the key to understanding what is influencing investors.

The modest 1.2% dividend yield is unlikely to be propping up the share price. We severely doubt anyone is particularly impressed with the modest 1.1% three-year revenue growth rate. While we don't have an obvious theory to explain the share price rise, a closer look at the data might be enlightening.

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

Take a more thorough look at Kyungdong Invest's financial health with this free report on its balance sheet.

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. We note that for Kyungdong Invest the TSR over the last 3 years was 88%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While it's never nice to take a loss, Kyungdong Invest shareholders can take comfort that , including dividends,their trailing twelve month loss of 4.5% wasn't as bad as the market loss of around 8.0%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 13% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. It's always interesting to track share price performance over the longer term. But to understand Kyungdong Invest better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Kyungdong Invest you should be aware of.

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 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.