Did You Participate In Any Of Seoul City Gas' (KRX:017390) Respectable 71% Return?

On average, over time, stock markets tend to rise higher. This makes investing attractive. But if you choose that path, you're going to buy some stocks that fall short of the market. Over the last year the Seoul City Gas Co., Ltd. (KRX:017390) share price is up 35%, but that's less than the broader market return. However, the longer term returns haven't been so impressive, with the stock up just 8.0% in the last three years.

See our latest analysis for Seoul City Gas

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 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.

Seoul City Gas was able to grow EPS by 219% in the last twelve months. It's fair to say that the share price gain of 35% did not keep pace with the EPS growth. So it seems like the market has cooled on Seoul City Gas, despite the growth. Interesting. This cautious sentiment is reflected in its (fairly low) P/E ratio of 2.69.

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

Dive deeper into Seoul City Gas' key metrics by checking this interactive graph of Seoul City Gas's earnings, revenue and cash flow.

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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Seoul City Gas, it has a TSR of 71% for the last year. 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

It's nice to see that Seoul City Gas shareholders have received a total shareholder return of 71% over the last year. Of course, that includes the dividend. That's better than the annualised return of 12% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for Seoul City Gas you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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