When we invest, we're generally looking for stocks that outperform the market average. And the truth is, you can make significant gains if you buy good quality businesses at the right price. For example, long term Tai Sang Land Development Limited (HKG:89) shareholders have enjoyed a 51% share price rise over the last half decade, well in excess of the market return of around 20% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 9.2% in the last year, including dividends.
View our latest analysis for Tai Sang Land Development
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During five years of share price growth, Tai Sang Land Development achieved compound earnings per share (EPS) growth of 3.5% per year. This EPS growth is slower than the share price growth of 8.6% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Tai Sang Land Development's key metrics by checking this interactive graph of Tai Sang Land Development's earnings, revenue and cash flow.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Tai Sang Land Development the TSR over the last 5 years was 79%, 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 Tai Sang Land Development shareholders have received a total shareholder return of 9.2% over the last year. That's including the dividend. Having said that, the five-year TSR of 12% a year, is even better. Before forming an opinion on Tai Sang Land Development you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.