Shareholders Of Hua Yu Lien Development (TPE:1436) Must Be Happy With Their 64% Return

The main point of investing for the long term is to make money. Better yet, you'd like to see the share price move up more than the market average. But Hua Yu Lien Development Co., Ltd (TPE:1436) has fallen short of that second goal, with a share price rise of 34% over five years, which is below the market return. Over the last twelve months the stock price has risen a very respectable 9.8%.

View our latest analysis for Hua Yu Lien Development

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 the last half decade, Hua Yu Lien Development became profitable. That would generally be considered a positive, so we'd expect the share price to be up. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. Indeed, the Hua Yu Lien Development share price has gained 27% in three years. Meanwhile, EPS is up 42% per year. This EPS growth is higher than the 8% average annual increase in the share price over the same three years. Therefore, it seems the market has moderated its expectations for growth, somewhat. This unenthusiastic sentiment is reflected in the stock's reasonably modest P/E ratio of 8.66.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It is of course excellent to see how Hua Yu Lien Development has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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 Hua Yu Lien Development the TSR over the last 5 years was 64%, 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

Hua Yu Lien Development shareholders gained a total return of 17% 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 10% over half a decade 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 Hua Yu Lien Development better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Hua Yu Lien Development (including 1 which is makes us a bit uncomfortable) .

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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