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It hasn't been the best quarter for Billington Holdings Plc (LON:BILN) shareholders, since the share price has fallen 22% in that time. But don't let that distract from the very nice return generated over three years. In the last three years the share price is up, 72%: better than the market.
So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.
See our latest analysis for Billington Holdings
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.
Billington Holdings was able to grow its EPS at 89% per year over three years, sending the share price higher. The average annual share price increase of 20% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock. This cautious sentiment is reflected in its (fairly low) P/E ratio of 4.87.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Billington Holdings has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Billington Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Billington Holdings the TSR over the last 3 years was 92%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
Billington Holdings shareholders are up 4.8% for the year (even including dividends). But that return falls short of the market. On the bright side, the longer term returns (running at about 7% a year, over half a decade) look better. Maybe the share price is just taking a breather while the business executes on its growth strategy. It's always interesting to track share price performance over the longer term. But to understand Billington Holdings better, we need to consider many other factors. For instance, we've identified 3 warning signs for Billington Holdings (1 is a bit unpleasant) that you should be aware of.