Shareholders Of Lih Tai Construction Enterprise (GTSM:5520) Must Be Happy With Their 99% Return

The main point of investing for the long term is to make money. Furthermore, you'd generally like to see the share price rise faster than the market But Lih Tai Construction Enterprise Co., Ltd. (GTSM:5520) has fallen short of that second goal, with a share price rise of 45% over five years, which is below the market return. On a brighter note, more newer shareholders are probably rather content with the 31% share price gain over twelve months.

Check out our latest analysis for Lih Tai Construction Enterprise

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

Over half a decade, Lih Tai Construction Enterprise managed to grow its earnings per share at 12% a year. The EPS growth is more impressive than the yearly share price gain of 8% over the same period. Therefore, it seems the market has become relatively pessimistic about the company. The reasonably low P/E ratio of 10.53 also suggests market apprehension.

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

Dive deeper into Lih Tai Construction Enterprise's key metrics by checking this interactive graph of Lih Tai Construction Enterprise's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. In the case of Lih Tai Construction Enterprise, it has a TSR of 99% 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

It's nice to see that Lih Tai Construction Enterprise shareholders have received a total shareholder return of 37% over the last year. And that does include the dividend. That gain is better than the annual TSR over five years, which is 15%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Lih Tai Construction Enterprise better, we need to consider many other factors. Take risks, for example - Lih Tai Construction Enterprise has 2 warning signs we think you should be aware of.

But note: Lih Tai Construction Enterprise may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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