Charoen Pokphand Enterprise(Taiwan) (TPE:1215) Has Rewarded Shareholders With An Exceptional 313% Total Return On Their Investment

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. For instance, the price of Charoen Pokphand Enterprise(Taiwan) Co., Ltd. (TPE:1215) stock is up an impressive 223% over the last five years. We note the stock price is up 1.4% in the last seven days.

View our latest analysis for Charoen Pokphand Enterprise(Taiwan)

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 five years of share price growth, Charoen Pokphand Enterprise(Taiwan) achieved compound earnings per share (EPS) growth of 20% per year. This EPS growth is lower than the 26% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.

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

We know that Charoen Pokphand Enterprise(Taiwan) 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. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Charoen Pokphand Enterprise(Taiwan), it has a TSR of 313% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Charoen Pokphand Enterprise(Taiwan) shareholders gained a total return of 22% during the year. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 33% a year, over half a decade) look better. Maybe the share price is just taking a breather while the business executes on its growth strategy. It's always interesting to track share price performance over the longer term. But to understand Charoen Pokphand Enterprise(Taiwan) better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Charoen Pokphand Enterprise(Taiwan) you should be aware of, and 1 of them makes us a bit uncomfortable.

Of course Charoen Pokphand Enterprise(Taiwan) may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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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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