The Nan Pao Resins Chemical (TPE:4766) Share Price Has Gained 22% And Shareholders Are Hoping For More

Investors can buy low cost index fund if they want to receive the average market return. But across the board there are plenty of stocks that underperform the market. For example, the Nan Pao Resins Chemical Co., Ltd. (TPE:4766) share price return of 22% over three years lags the market return in the same period. In the last year the stock price gained, albeit only 2.3%.

See our latest analysis for Nan Pao Resins Chemical

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).

Nan Pao Resins Chemical was able to grow its EPS at 2.0% per year over three years, sending the share price higher. This EPS growth is lower than the 7% average annual increase in the share price. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. It is quite common to see investors become enamoured with a business, after a few years of solid progress.

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

We know that Nan Pao Resins Chemical has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Nan Pao Resins Chemical will grow revenue in the future.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Nan Pao Resins Chemical the TSR over the last 3 years was 36%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Nan Pao Resins Chemical produced a TSR of 6.9% over the last year. Unfortunately this falls short of the market return of around 22%. At least the longer term returns (running at about 11% a year, are better. Even the best companies don't see strong share price performance every year. It's always interesting to track share price performance over the longer term. But to understand Nan Pao Resins Chemical better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Nan Pao Resins Chemical you should know about.

Of course Nan Pao Resins Chemical 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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