The one-year returns for Kimberly-Clark's (NYSE:KMB) shareholders have been , yet its earnings growth was even better

On average, over time, stock markets tend to rise higher. This makes investing attractive. But not every stock you buy will perform as well as the overall market. Unfortunately for shareholders, while the Kimberly-Clark Corporation (NYSE:KMB) share price is up 17% in the last year, that falls short of the market return. Having said that, the longer term returns aren't so impressive, with stock gaining just 4.8% in three years.

The past week has proven to be lucrative for Kimberly-Clark investors, so let's see if fundamentals drove the company's one-year performance.

See our latest analysis for Kimberly-Clark

There is no denying that markets are sometimes efficient, but prices do not always reflect 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).

During the last year Kimberly-Clark grew its earnings per share (EPS) by 39%. It's fair to say that the share price gain of 17% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Kimberly-Clark as it was before. This could be an opportunity.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

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 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. As it happens, Kimberly-Clark's TSR for the last 1 year was 22%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Kimberly-Clark's TSR for the year was broadly in line with the market average, at 22%. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 6%. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. It's always interesting to track share price performance over the longer term. But to understand Kimberly-Clark better, we need to consider many other factors. For instance, we've identified 1 warning sign for Kimberly-Clark that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.