Shareholders Of Lian Hwa Foods (TPE:1231) Must Be Happy With Their 140% Total Return

When we invest, we're generally looking for stocks that outperform the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long term Lian Hwa Foods Corporation (TPE:1231) shareholders have enjoyed a 96% share price rise over the last half decade, well in excess of the market return of around 79% (not including dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 26% , including dividends .

Check out our latest analysis for Lian Hwa Foods

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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).

Over half a decade, Lian Hwa Foods managed to grow its earnings per share at 12% a year. So the EPS growth rate is rather close to the annualized share price gain of 14% per year. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Rather, the share price has approximately tracked EPS growth.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Lian Hwa Foods' 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). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Lian Hwa Foods the TSR over the last 5 years was 140%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Lian Hwa Foods shareholders are up 26% for the year (even including dividends). But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 19% over half a decade This suggests the company might be improving over time. It's always interesting to track share price performance over the longer term. But to understand Lian Hwa Foods better, we need to consider many other factors. Take risks, for example - Lian Hwa Foods has 2 warning signs we think you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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