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While not a mind-blowing move, it is good to see that the DFS Furniture plc (LON:DFS) share price has gained 22% in the last three months. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 51% in the last three years, falling well short of the market return.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
View our latest analysis for DFS Furniture
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).
DFS Furniture saw its share price decline over the three years in which its EPS also dropped, falling to a loss. This was, in part, due to extraordinary items impacting earnings. Due to the loss, it's not easy to use EPS as a reliable guide to the business. But it's safe to say we'd generally expect the share price to be lower as a result!
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
This free interactive report on DFS Furniture's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About The Total Shareholder Return (TSR)?
We've already covered DFS Furniture's share price action, but we should also mention its 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. Its history of dividend payouts mean that DFS Furniture's TSR, which was a 41% drop over the last 3 years, was not as bad as the share price return.
A Different Perspective
It's nice to see that DFS Furniture shareholders have received a total shareholder return of 33% over the last year. That certainly beats the loss of about 4% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 1 warning sign for DFS Furniture that you should be aware of before investing here.