Hsing Ta Cement (TPE:1109) Has Gifted Shareholders With A Fantastic 117% Total Return On Their Investment

If you buy and hold a stock for many years, you'd hope to be making a profit. But more than that, you probably want to see it rise more than the market average. But Hsing Ta Cement Company Limited (TPE:1109) has fallen short of that second goal, with a share price rise of 75% over five years, which is below the market return. Over the last twelve months the stock price has risen a very respectable 12%.

Check out our latest analysis for Hsing Ta Cement

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.

Over half a decade, Hsing Ta Cement managed to grow its earnings per share at 125% a year. The EPS growth is more impressive than the yearly share price gain of 12% over the same period. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 7.26.

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

Dive deeper into Hsing Ta Cement's key metrics by checking this interactive graph of Hsing Ta Cement'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). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Hsing Ta Cement the TSR over the last 5 years was 117%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Hsing Ta Cement shareholders gained a total return of 19% during the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 17% per year over five year. 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 Hsing Ta Cement better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hsing Ta Cement you should know about.

We will like Hsing Ta Cement better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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