In This Article:
Rashtriya Chemicals and Fertilizers Limited (NSE:RCF) shareholders should be happy to see the share price up 25% in the last month. But that is minimal compensation for the share price under-performance over the last year. After all, the share price is down 22% in the last year, significantly under-performing the market.
Check out our latest analysis for Rashtriya Chemicals and Fertilizers
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Even though the Rashtriya Chemicals and Fertilizers share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past. It's surprising to see the share price fall so much, despite the improved EPS. So it's well worth checking out some other metrics, too.
Given the yield is quite low, at 1.6%, we doubt the dividend can shed much light on the share price. Rashtriya Chemicals and Fertilizers managed to grow revenue over the last year, which is usually a real positive. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Rashtriya Chemicals and Fertilizers's earnings, revenue and cash flow.
What about the Total Shareholder Return (TSR)?
We've already covered Rashtriya Chemicals and Fertilizers's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Rashtriya Chemicals and Fertilizers shareholders, and that cash payout explains why its total shareholder loss of 21%, over the last year, isn't as bad as the share price return.
A Different Perspective
We regret to report that Rashtriya Chemicals and Fertilizers shareholders are down 21% for the year (even including dividends) . Unfortunately, that's worse than the broader market decline of 0.5%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 0.5% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Before deciding if you like the current share price, check how Rashtriya Chemicals and Fertilizers scores on these 3 valuation metrics.