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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the CSC Financial Co., Ltd. (HKG:6066) share price is 28% higher than it was a year ago, much better than the market return of around -10% (not including dividends) in the same period. That's a solid performance by our standards! CSC Financial hasn't been listed for long, so it's still not clear if it is a long term winner.
Check out our latest analysis for CSC Financial
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.
Over the last twelve months, CSC Financial actually shrank its EPS by 8.0%.
This means it's unlikely the market is judging the company based on earnings growth. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.
Unfortunately CSC Financial's fell 10% over twelve months. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on CSC Financial's 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 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for CSC Financial the TSR over the last year was 38%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
It's nice to see that CSC Financial shareholders have gained 38% over the last year , including dividends . That's better than the more recent three month gain of 1.8%, implying that share price has plateaued recently. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). Keeping this in mind, a solid next step might be to take a look at CSC Financial's dividend track record. This free interactive graph is a great place to start.