Qatar National Cement Company (Q.P.S.C.)'s (DSM:QNCD) Shareholders Are Down 43% On Their Shares

While not a mind-blowing move, it is good to see that the Qatar National Cement Company (Q.P.S.C.) (DSM:QNCD) share price has gained 14% in the last three months. But if you look at the last five years the returns have not been good. After all, the share price is down 43% in that time, significantly under-performing the market.

View our latest analysis for Qatar National Cement Company (Q.P.S.C.)

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 five years over which the share price declined, Qatar National Cement Company (Q.P.S.C.)'s earnings per share (EPS) dropped by 20% each year. This fall in the EPS is worse than the 11% compound annual share price fall. The relatively muted share price reaction might be because the market expects the business to turn around.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

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 Qatar National Cement Company (Q.P.S.C.) the TSR over the last 5 years was -24%, 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

Investors in Qatar National Cement Company (Q.P.S.C.) had a tough year, with a total loss of 8.2% (including dividends), against a market gain of about 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Qatar National Cement Company (Q.P.S.C.) better, we need to consider many other factors. Take risks, for example - Qatar National Cement Company (Q.P.S.C.) has 4 warning signs (and 1 which is potentially serious) we think you should know about.

We will like Qatar National Cement Company (Q.P.S.C.) 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 QA 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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