The one-year returns for Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna's (WSE:PKO) shareholders have been decent, yet its earnings growth was even better

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. For example, the Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna (WSE:PKO) share price is up 72% in the last 1 year, clearly besting the market return of around 21% (not including dividends). That's a solid performance by our standards! Looking back further, the stock price is 49% higher than it was three years ago.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Check out our latest analysis for Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna

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 Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna grew its earnings per share (EPS) by 82%. This EPS growth is reasonably close to the 72% increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. We don't think its coincidental that the share price is growing at a similar rate to the earnings per share.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna's balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna, it has a TSR of 76% 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

We're pleased to report that Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna shareholders have received a total shareholder return of 76% over one year. And that does include the dividend. That's better than the annualised return of 10% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before forming an opinion on Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna you might want to consider these 3 valuation metrics.

But note: Powszechna Kasa Oszczednosci Bank Polski Spólka Akcyjna 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 Polish exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com