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It hasn't been the best quarter for United-Guardian, Inc. (NASDAQ:UG) shareholders, since the share price has fallen 23% in that time. But looking back over the last year, the returns have actually been rather pleasing! To wit, it had solidly beat the market, up 42%.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for United-Guardian
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).
During the last year United-Guardian grew its earnings per share (EPS) by 38%. This EPS growth is reasonably close to the 42% increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. It looks like the share price is responding to the EPS.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. We note that for United-Guardian the TSR over the last 1 year was 51%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
It's nice to see that United-Guardian shareholders have received a total shareholder return of 51% over the last year. Of course, that includes the dividend. That certainly beats the loss of about 5% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. To that end, you should learn about the 3 warning signs we've spotted with United-Guardian (including 1 which is significant) .