National Shipping Company of Saudi Arabia's (TADAWUL:4030) 9.8% CAGR outpaced the company's earnings growth over the same five-year period

Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. To wit, the National Shipping Company of Saudi Arabia share price has climbed 28% in five years, easily topping the market return of 17% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 15%.

The past week has proven to be lucrative for National Shipping Company of Saudi Arabia investors, so let's see if fundamentals drove the company's five-year performance.

See our latest analysis for National Shipping Company of Saudi Arabia

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 five years of share price growth, National Shipping Company of Saudi Arabia achieved compound earnings per share (EPS) growth of 5.4% per year. This EPS growth is reasonably close to the 5% average annual increase in the share price. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Rather, the share price has approximately tracked EPS growth.

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

Dive deeper into National Shipping Company of Saudi Arabia's key metrics by checking this interactive graph of National Shipping Company of Saudi Arabia's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

We've already covered National Shipping Company of Saudi Arabia's share price action, but we should also mention its 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. National Shipping Company of Saudi Arabia's TSR of 60% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

We're pleased to report that National Shipping Company of Saudi Arabia shareholders have received a total shareholder return of 15% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 10% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand National Shipping Company of Saudi Arabia better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for National Shipping Company of Saudi Arabia you should be aware of, and 1 of them is concerning.

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