Second Generating Company of the Electric Power Wholesale Market (MCX:OGKB) sheds 9.7% this week, as yearly returns fall more in line with earnings growth

It hasn't been the best quarter for Public Joint-Stock Company "Second Generating Company of the Electric Power Wholesale Market" (MCX:OGKB) shareholders, since the share price has fallen 20% in that time. In contrast the stock is up over the last three years. In that time, it is up 43%, which isn't bad, but not amazing either.

While the stock has fallen 9.7% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for Second Generating Company of the Electric Power Wholesale Market

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During three years of share price growth, Second Generating Company of the Electric Power Wholesale Market achieved compound earnings per share growth of 28% per year. The average annual share price increase of 13% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock. This cautious sentiment is reflected in its (fairly low) P/E ratio of 3.66.

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

We know that Second Generating Company of the Electric Power Wholesale Market 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. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Second Generating Company of the Electric Power Wholesale Market the TSR over the last 3 years was 77%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While the broader market gained around 5.2% in the last year, Second Generating Company of the Electric Power Wholesale Market shareholders lost 28% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 8%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Second Generating Company of the Electric Power Wholesale Market better, we need to consider many other factors. For instance, we've identified 3 warning signs for Second Generating Company of the Electric Power Wholesale Market (1 doesn't sit too well with us) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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