If You Had Bought Napier Port Holdings (NZSE:NPH) Shares A Year Ago You'd Have Earned 20% Returns

The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Napier Port Holdings Limited (NZSE:NPH) share price is up 20% in the last year, clearly besting the market return of around 9.7% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.

See our latest analysis for Napier Port Holdings

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 Napier Port Holdings grew its earnings per share (EPS) by 94%. It's fair to say that the share price gain of 20% did not keep pace with the EPS growth. So it seems like the market has cooled on Napier Port Holdings, despite the growth. Interesting.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that Napier Port Holdings has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Napier Port Holdings will grow revenue in the future.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Napier Port Holdings' TSR for the last year was 23%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Napier Port Holdings shareholders should be happy with the total gain of 23% over the last twelve months, including dividends. We regret to report that the share price is down 2.3% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

But note: Napier Port Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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