Those who invested in Qatar Islamic Bank (Q.P.S.C.) (DSM:QIBK) five years ago are up 71%

When we invest, we're generally looking for stocks that outperform the market average. And the truth is, you can make significant gains if you buy good quality businesses at the right price. For example, long term Qatar Islamic Bank (Q.P.S.C.) (DSM:QIBK) shareholders have enjoyed a 47% share price rise over the last half decade, well in excess of the market return of around 9.7% (not including dividends).

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

Check out our latest analysis for Qatar Islamic Bank (Q.P.S.C.)

SWOT Analysis for Qatar Islamic Bank (Q.P.S.C.)

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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).

Over half a decade, Qatar Islamic Bank (Q.P.S.C.) managed to grow its earnings per share at 11% a year. This EPS growth is higher than the 8% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 11.05.

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

We know that Qatar Islamic Bank (Q.P.S.C.) has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Qatar Islamic Bank (Q.P.S.C.)'s TSR for the last 5 years was 71%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Qatar Islamic Bank (Q.P.S.C.) shareholders are down 14% over twelve months (even including dividends), which isn't far from the market return of -16%. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over five years. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. Importantly, we haven't analysed Qatar Islamic Bank (Q.P.S.C.)'s dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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