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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For example, the Interregional Distribution Grid Company of Urals, Joint Stock Company (MCX:MRKU) share price has soared 203% in the last half decade. Most would be very happy with that.
See our latest analysis for Interregional Distribution Grid Company of Urals
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.
During the five years of share price growth, Interregional Distribution Grid Company of Urals moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. Indeed, the Interregional Distribution Grid Company of Urals share price has gained 19% in three years. In the same period, EPS is up 19% per year. This EPS growth is higher than the 6.1% average annual increase in the share price over the same three years. So you might conclude the market is a little more cautious about the stock, these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 4.22.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Interregional Distribution Grid Company of Urals has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Interregional Distribution Grid Company of Urals will grow revenue in the future.
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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Interregional Distribution Grid Company of Urals, it has a TSR of 332% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.