Earnings growth outpaced the notable 37% return delivered to JW Lifescience (KRX:234080) shareholders over the last year

On average, over time, stock markets tend to rise higher. This makes investing attractive. But if when you choose to buy stocks, some of them will be below average performers. Unfortunately for shareholders, while the JW Lifescience Corporation (KRX:234080) share price is up 31% in the last year, that falls short of the market return. However, the stock hasn't done so well in the longer term, with the stock only up 20% in three years.

Since the stock has added ₩24b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

During the last year JW Lifescience grew its earnings per share (EPS) by 86%. This EPS growth is significantly higher than the 31% increase in the share price. Therefore, it seems the market isn't as excited about JW Lifescience as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 4.60.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on JW Lifescience's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of JW Lifescience, it has a TSR of 37% for the last 1 year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

JW Lifescience provided a TSR of 37% over the last twelve months. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 1.8% per year, over five years. It could well be that the business is stabilizing. Importantly, we haven't analysed JW Lifescience's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.

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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.