If you want to compound wealth in the stock market, you can do so by buying an index fund. But if you pick the right individual stocks, you could make more than that. For example, the iFAST Corporation Ltd. (SGX:AIY) share price is up 21% in the last year, clearly besting than the market return of around -8.9% (not including dividends). So that should have shareholders smiling. In contrast, the longer term returns are negative, since the share price is 13% lower than it was three years ago.

View our latest analysis for iFAST

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

iFAST was able to grow EPS by 20% in the last twelve months. This EPS growth is reasonably close to the 21% increase in the share price. This makes us think the market hasn’t really changed its sentiment around the company, in the last year. We don’t think its coincidental that the share price is growing at a similar rate to the earnings per share.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that iFAST has improved its bottom line lately, but is it going to grow revenue? If you’re interested, you could check this free report showing consensus revenue forecasts.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of iFAST, it has a TSR of 25% for the last year. That exceeds its share price return that we previously mentioned. And there’s no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We’re pleased to report that iFAST rewarded shareholders with a total shareholder return of 25% over the last year. That includes the value of the dividend. That certainly beats the loss of about 1.6% per year over three years. The optimist would say this is evidence that the stock has bottomed, and better days lie ahead. Before forming an opinion on iFAST you might want to consider these 3 valuation metrics.