The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. To wit, the LHN Limited (Catalist:41O) share price has flown 142% in the last three years. That sort of return is as solid as granite. It's also good to see the share price up 21% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 11% in 90 days).

So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.

View our latest analysis for LHN

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 three years of share price growth, LHN achieved compound earnings per share growth of 77% per year. This EPS growth is higher than the 34% average annual increase in the share price. So it seems investors have become more cautious about the company, over time. This cautious sentiment is reflected in its (fairly low) P/E ratio of 2.81.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It is of course excellent to see how LHN has grown profits over the years, but the future is more important for shareholders. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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 LHN the TSR over the last 3 years was 195%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that LHN shareholders have received a total shareholder return of 9.2% over the last year. That's including the dividend. Having said that, the five-year TSR of 11% a year, is even better. It's always interesting to track share price performance over the longer term. But to understand LHN better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with LHN (including 1 which can't be ignored) .