Did Vinte Viviendas Integrales. de's (BMV:VINTE) Share Price Deserve to Gain 10%?

One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. For example, the Vinte Viviendas Integrales, S.A.B. de C.V. (BMV:VINTE) share price is up 10% in the last three years, clearly besting the market decline of around 5.2% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 1.9% in the last year , including dividends .

See our latest analysis for Vinte Viviendas Integrales. de

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.

Vinte Viviendas Integrales. de was able to grow its EPS at 0.7% per year over three years, sending the share price higher. This EPS growth is lower than the 3% average annual increase in the share price. This indicates that the market is feeling more optimistic on the stock, after the last few years of progress. That's not necessarily surprising considering the three-year track record of earnings growth.

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 Vinte Viviendas Integrales. de's key metrics by checking this interactive graph of Vinte Viviendas Integrales. de'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 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 Vinte Viviendas Integrales. de the TSR over the last 3 years was 20%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Vinte Viviendas Integrales. de shareholders are up 1.9% for the year (even including dividends). Unfortunately this falls short of the market return of around 5.7%. But the (superior) three-year TSR of 6% per year is some consolation. Even the best companies don't see strong share price performance every year. 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. Take risks, for example - Vinte Viviendas Integrales. de has 2 warning signs (and 1 which is potentially serious) we think you should know about.

Of course Vinte Viviendas Integrales. de 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 MX 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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