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On average, over time, stock markets tend to rise higher. This makes investing attractive. But not every stock you buy will perform as well as the overall market. Over the last year the Indofood Agri Resources Ltd. (SGX:5JS) share price is up 10%, but that's less than the broader market return. Longer term, the stock is up 8.3% in three years.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for Indofood Agri Resources
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.
Indofood Agri Resources was able to grow EPS by 35% in the last twelve months. This EPS growth is significantly higher than the 10% increase in the share price. Therefore, it seems the market isn't as excited about Indofood Agri Resources as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 6.62.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
Dive deeper into Indofood Agri Resources' key metrics by checking this interactive graph of Indofood Agri Resources'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. As it happens, Indofood Agri Resources' TSR for the last 1 year was 13%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Indofood Agri Resources shareholders gained a total return of 13% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it's actually better than the average return of 1.9% over half a decade This suggests the company might be improving over time. Before deciding if you like the current share price, check how Indofood Agri Resources scores on these 3 valuation metrics.