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It hasn't been the best quarter for General Dynamics Corporation (NYSE:GD) shareholders, since the share price has fallen 11% in that time. On the bright side the share price is up over the last half decade. Unfortunately its return of 49% is below the market return of 98%.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
See our latest analysis for General Dynamics
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Over half a decade, General Dynamics managed to grow its earnings per share at 2.6% a year. This EPS growth is slower than the share price growth of 8% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We know that General Dynamics has improved its bottom line lately, but is it going to grow revenue? Check if analysts think General Dynamics 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). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of General Dynamics, it has a TSR of 68% 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.
A Different Perspective
General Dynamics shareholders gained a total return of 5.1% during the year. But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 11% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
But note: General Dynamics may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).