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Metso Corporation (HEL:METSO) shareholders might be concerned after seeing the share price drop 13% in the last month. In contrast the stock has done reasonably well over three years. In fact the stock is up 37%, which is better than the market return of 32%.

View our latest analysis for Metso

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.

During the three years of share price growth, Metso actually saw its earnings per share (EPS) drop 17% per year. This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

Interestingly, the dividend has increased over time; so that may have given the share price a boost. It could be that the company is reaching maturity and dividend investors are buying for the yield. On top of that, revenue grew at a rate of 6.2% per year, and it's likely investors interpret that as pointing to a brighter future.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for Metso in this interactive graph of future profit estimates.

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, Metso's TSR for the last 3 years was 50%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

While it's never nice to take a loss, Metso shareholders can take comfort that, including dividends, their trailing twelve month loss of 2.1% wasn't as bad as the market loss of around 5.6%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 5.3% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. Before forming an opinion on Metso you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.

We will like Metso better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on FI exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.