Shareholders Of Hua Eng Wire & Cable (TPE:1608) Must Be Happy With Their 102% Total Return

Hua Eng Wire & Cable Co., Ltd. (TPE:1608) shareholders might be concerned after seeing the share price drop 19% in the last month. On the bright side the share price is up over the last half decade. In that time, it is up 76%, which isn't bad, but is below the market return of 136%.

View our latest analysis for Hua Eng Wire & Cable

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

During the five years of share price growth, Hua Eng Wire & Cable moved from a loss to profitability. That's generally thought to be a genuine positive, so we would expect to see an increasing share price. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. In fact, the Hua Eng Wire & Cable stock price is 2.1% lower in the last three years. During the same period, EPS grew by 5.1% each year. So there seems to be a mismatch between the positive EPS growth and the change in the share price, which is down -0.7% per year.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into Hua Eng Wire & Cable's key metrics by checking this interactive graph of Hua Eng Wire & Cable's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Hua Eng Wire & Cable's TSR for the last 5 years was 102%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

Hua Eng Wire & Cable shareholders are up 25% for the year (even including dividends). But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 15% per year over five year. This suggests the company might be improving over time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 3 warning signs for Hua Eng Wire & Cable that you should be aware of before investing here.

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 TW exchanges.

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