Ideally, your overall portfolio should beat the market average. But in any portfolio, there will be mixed results between individual stocks. So we wouldn't blame long term AWF Madison Group Limited (NZSE:AWF) shareholders for doubting their decision to hold, with the stock down 28% over a half decade. It's up 3.3% in the last seven days.
See our latest analysis for AWF Madison Group
There is no denying that markets are sometimes efficient, but prices do not always reflect 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.
Looking back five years, both AWF Madison Group's share price and EPS declined; the latter at a rate of 28% per year. This fall in the EPS is worse than the 6.4% compound annual share price fall. So investors might expect EPS to bounce back -- or they may have previously foreseen the EPS decline. The high P/E ratio of 48.20 suggests that shareholders believe earnings will grow in the years ahead.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into AWF Madison Group's key metrics by checking this interactive graph of AWF Madison Group's earnings, revenue and cash flow.
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. In the case of AWF Madison Group, it has a TSR of 4.9% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
AWF Madison Group shareholders are up 13% for the year (even including dividends) . Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 1.0% over half a decade This suggests the company might be improving over time. Importantly, we haven't analysed AWF Madison Group's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.
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