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In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But if you try your hand at stock picking, your risk returning less than the market. We regret to report that long term Raffles Medical Group Ltd (SGX:BSL) shareholders have had that experience, with the share price dropping 32% in three years, versus a market return of about 26%.

View our latest analysis for Raffles Medical Group

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).

Raffles Medical Group saw its EPS decline at a compound rate of 1.8% per year, over the last three years. The share price decline of 12% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

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

Dive deeper into Raffles Medical Group's key metrics by checking this interactive graph of Raffles Medical Group's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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 Raffles Medical Group the TSR over the last 3 years was -28%, 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 Raffles Medical Group shareholders have received a total shareholder return of 8.2% over the last year. Of course, that includes the dividend. Notably the five-year annualised TSR loss of 2.5% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. Is Raffles Medical Group cheap compared to other companies? These 3 valuation measures might help you decide.