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We believe all investors should strive to buy and hold quality multi-year winners. And the highest quality companies can see their stock prices rise significantly. Think of the smart investors who held stocks. Energy Controller AG (ETR:EKT) share price has increased by 333% over the past five years. This is just one example of the spectacular gains some long-term investors have achieved.
Let’s look at the underlying fundamentals over the long term and see if they are aligned with shareholder returns.
Check out our latest analysis for Energykontor.
While there is no denying that markets are sometimes efficient, prices do not always reflect underlying company performance. By comparing earnings per share (EPS) and share price changes over time, we can learn how investor attitudes to a company have changed over time.
Over five years, Energiekontor was able to grow its earnings per share at 38% per year. Therefore, the EPS growth rate is quite close to the annualized share price increase of 34% per year. This shows that investor sentiment toward the company has not changed significantly. In fact, share prices seem to be responding to EPS.
The image below shows how EPS has changed over time (unveil the exact values by clicking on the image).
Of course, it’s great to see how Energiekontor has grown its profits over the years, but the future is more important to shareholders. Use this to take a more thorough look at Energiekontor’s financials. free Report the balance sheet.
What will happen to the dividend?
When looking at return on investment, it is important to consider the following differences: Total shareholder return (TSR) and stock price return. Whereas the price/earnings ratio 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. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. For Energiekontor, the TSR for the last 5 years is 371%. This exceeds the stock return mentioned earlier. This is primarily due to dividend payments.
different perspective
Energiekontor shareholders are up 6.7% for the year (even including dividends). However, its returns are below the market. On the bright side, the long-term returns (running at about 36% per year over five years) look better. This could be a business worth watching, given that it continues to be well received by the market over time. 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, consider the ever-present fear of investment risk. We’ve identified 1 warning sign Understanding these should be part of your investment process.
of course Energykontor may not be the best stock to buy.So you might want to see this free A collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.
Have feedback on this article? Curious about its content? contact Please contact us directly. Alternatively, email our editorial team at Simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and the articles are not intended as financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
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