Ta Chen Stainless Pipe (TWSE:2027) investors are up 10% in the past week, but earnings have declined over the last five years

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. Unfortunately for shareholders, while the Ta Chen Stainless Pipe Co., Ltd. (TWSE:2027) share price is up 67% in the last five years, that's less than the market return. Looking at the last year alone, the stock is up 16%.

Since it's been a strong week for Ta Chen Stainless Pipe shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Ta Chen Stainless Pipe

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, Ta Chen Stainless Pipe actually saw its EPS drop 10% per year.

This means it's unlikely the market is judging the company based on earnings growth. Because earnings per share don't seem to match up with the share price, we'll take a look at other metrics instead.

On the other hand, Ta Chen Stainless Pipe's revenue is growing nicely, at a compound rate of 9.0% over the last five years. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Ta Chen Stainless Pipe's balance sheet strength is a great place to start, if you want to investigate the stock further.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Ta Chen Stainless Pipe the TSR over the last 5 years was 114%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Ta Chen Stainless Pipe provided a TSR of 19% over the last twelve months. 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 16% over half a decade This suggests the company might be improving over time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 2 warning signs for Ta Chen Stainless Pipe that you should be aware of before investing here.

But note: Ta Chen Stainless Pipe 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 Taiwanese exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.