Yungshin Construction & DevelopmentLtd (GTSM:5508) Has Gifted Shareholders With A Fantastic 128% Total Return On Their Investment

If you buy and hold a stock for many years, you'd hope to be making a profit. Furthermore, you'd generally like to see the share price rise faster than the market But Yungshin Construction & Development Co.,Ltd. (GTSM:5508) has fallen short of that second goal, with a share price rise of 57% over five years, which is below the market return. Over the last twelve months the stock price has risen a very respectable 18%.

Check out our latest analysis for Yungshin Construction & DevelopmentLtd

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During five years of share price growth, Yungshin Construction & DevelopmentLtd actually saw its EPS drop 1.6% per year.

By glancing at these numbers, we'd posit that the decline in earnings per share is not representative of how the business has changed over the years. Therefore, it's worth taking a look at other metrics to try to understand the share price movements.

There's no sign of growing dividends, which might have explained the resilient share price. It could be that the revenue growth of 5.5% per year is viewed as evidence that Yungshin Construction & DevelopmentLtd is growing. Indeed, revenue growth, rather than EPS, might be the current focus of the business.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Yungshin Construction & DevelopmentLtd stock, you should check out this FREE detailed report on its balance sheet.

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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Yungshin Construction & DevelopmentLtd's TSR for the last 5 years was 128%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Yungshin Construction & DevelopmentLtd shareholders gained a total return of 24% during the year. 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 18% over half a decade It is possible that returns will improve along with the business fundamentals. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Yungshin Construction & DevelopmentLtd has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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