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One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. For example, NÜRNBERGER Beteiligungs-AG (ETR:NBG6) shareholders have seen the share price rise 21% over three years, well in excess of the market return (-2.1%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 1.4%, including dividends.
See our latest analysis for NÜRNBERGER Beteiligungs-AG
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During three years of share price growth, NÜRNBERGER Beteiligungs-AG achieved compound earnings per share growth of 7.6% per year. We note that the 6.5% yearly (average) share price gain isn't too far from the EPS growth rate. Coincidence? Probably not. That suggests that the market sentiment around the company hasn't changed much over that time. Rather, the share price has approximately tracked EPS growth.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Dive deeper into NÜRNBERGER Beteiligungs-AG's key metrics by checking this interactive graph of NÜRNBERGER Beteiligungs-AG'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. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for NÜRNBERGER Beteiligungs-AG the TSR over the last 3 years was 37%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
We're pleased to report that NÜRNBERGER Beteiligungs-AG shareholders have received a total shareholder return of 1.4% over one year. That's including the dividend. However, the TSR over five years, coming in at 3.5% per year, is even more impressive. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. Keeping this in mind, a solid next step might be to take a look at NÜRNBERGER Beteiligungs-AG's dividend track record. This free interactive graph is a great place to start.