Stock pickers are generally looking for stocks that will outperform the broader market. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. For example, the India Motor Parts and Accessories Limited (NSE:IMPAL) share price is up 41% in the last 5 years, clearly besting the market return of around 30% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 4.2% in the last year , including dividends .

View our latest analysis for India Motor Parts and Accessories

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Over half a decade, India Motor Parts and Accessories managed to grow its earnings per share at 7.2% a year. That makes the EPS growth particularly close to the yearly share price growth of 7.2%. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. In fact, the share price seems to largely reflect the EPS growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on India Motor Parts and Accessories'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. 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 India Motor Parts and Accessories the TSR over the last 5 years was 53%, 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 India Motor Parts and Accessories shareholders have received a total shareholder return of 4.2% over the last year. Of course, that includes the dividend. Having said that, the five-year TSR of 8.9% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. Is India Motor Parts and Accessories cheap compared to other companies? These 3 valuation measures might help you decide.