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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). For example, the Halyk Bank of Kazakhstan Joint Stock Company (LON:HSBK) share price is up 45% in the last 1 year, clearly besting the market return of around 5.1% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! The longer term returns have not been as good, with the stock price only 7.3% higher than it was three years ago.
Since the stock has added US$174m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
Check out our latest analysis for Halyk Bank of Kazakhstan
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.
Halyk Bank of Kazakhstan was able to grow EPS by 7.1% in the last twelve months. This EPS growth is significantly lower than the 45% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it a year ago.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into Halyk Bank of Kazakhstan's key metrics by checking this interactive graph of Halyk Bank of Kazakhstan's earnings, revenue and cash flow.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Halyk Bank of Kazakhstan's TSR for the last 1 year was 64%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
It's good to see that Halyk Bank of Kazakhstan has rewarded shareholders with a total shareholder return of 64% in the last twelve months. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 23% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Halyk Bank of Kazakhstan has 1 warning sign we think you should be aware of.