Would Shareholders Who Purchased Orion Engineered Carbons' (NYSE:OEC) Stock Three Years Be Happy With The Share price Today?

It is doubtless a positive to see that the Orion Engineered Carbons S.A. (NYSE:OEC) share price has gained some 32% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. In fact, the share price is down 35% in the last three years, falling well short of the market return.

Check out our latest analysis for Orion Engineered Carbons

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 the three years that the share price fell, Orion Engineered Carbons' earnings per share (EPS) dropped by 27% each year. This fall in the EPS is worse than the 14% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

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. Dive deeper into the earnings by checking this interactive graph of Orion Engineered Carbons' earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered Orion Engineered Carbons' share price action, but we should also mention its 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. Orion Engineered Carbons' TSR of was a loss of 30% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

Orion Engineered Carbons shareholders are down 13% for the year, but the market itself is up 23%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 9%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Orion Engineered Carbons better, we need to consider many other factors. For example, we've discovered 4 warning signs for Orion Engineered Carbons that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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