Those who invested in National Shipping Company of Saudi Arabia (TADAWUL:4030) three years ago are up 48%

It hasn't been the best quarter for The National Shipping Company of Saudi Arabia (TADAWUL:4030) shareholders, since the share price has fallen 13% in that time. But over three years, the returns would have left most investors smiling After all, the share price is up a market-beating 39% in that time.

So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.

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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 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 three years of share price growth, National Shipping Company of Saudi Arabia achieved compound earnings per share growth of 85% per year. This EPS growth is higher than the 11% average annual increase in the share price. Therefore, it seems the market has moderated its expectations for growth, somewhat. This cautious sentiment is reflected in its (fairly low) P/E ratio of 10.27.

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 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, National Shipping Company of Saudi Arabia's TSR for the last 3 years was 48%, 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

Although it hurts that National Shipping Company of Saudi Arabia returned a loss of 1.7% in the last twelve months, the broader market was actually worse, returning a loss of 9.2%. Longer term investors wouldn't be so upset, since they would have made 9%, each year, over five years. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. 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. Even so, be aware that National Shipping Company of Saudi Arabia is showing 3 warning signs in our investment analysis , and 1 of those is significant...

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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.