The 16% return delivered to IOI Corporation Berhad's (KLSE:IOICORP) shareholders actually lagged YoY earnings growth

The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. To wit, the IOI Corporation Berhad (KLSE:IOICORP) share price is 13% higher than it was a year ago, much better than the market decline of around 3.7% (not including dividends) in the same period. That's a solid performance by our standards! The longer term returns have not been as good, with the stock price only 1.8% higher than it was three years ago.

Since the stock has added RM1.6b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for IOI Corporation Berhad

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 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 the last year IOI Corporation Berhad grew its earnings per share (EPS) by 77%. This EPS growth is significantly higher than the 13% increase in the share price. So it seems like the market has cooled on IOI Corporation Berhad, despite the growth. Interesting.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that IOI Corporation Berhad has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of IOI Corporation Berhad, it has a TSR of 16% 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

It's good to see that IOI Corporation Berhad has rewarded shareholders with a total shareholder return of 16% in the last twelve months. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 3% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 - IOI Corporation Berhad has 2 warning signs (and 1 which is potentially serious) we think you should know about.

We will like IOI Corporation Berhad better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on MY 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.