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If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the Genesis Land Development Corp. (TSE:GDC) share price is 80% higher than it was a year ago, much better than the market return of around 20% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Also impressive, the stock is up 57% over three years, making long term shareholders happy, too.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
See our latest analysis for Genesis Land Development
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.
During the last year Genesis Land Development grew its earnings per share (EPS) by 175%. This EPS growth is significantly higher than the 80% increase in the share price. Therefore, it seems the market isn't as excited about Genesis Land Development as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 9.41.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on Genesis Land Development'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. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Genesis Land Development, it has a TSR of 92% for the last 1 year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
It's good to see that Genesis Land Development has rewarded shareholders with a total shareholder return of 92% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 17% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Genesis Land Development better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Genesis Land Development you should be aware of.