Investing in DKSH Holding (VTX:DKSH) three years ago would have earned you a 28% gain

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Buying a low-cost index fund will get you the average return of the market. But in any diversified portfolio of stocks, you will see some that are below average. Unfortunately for shareholders, while the DKSH Holding SA (VTX:DKSH) The stock price has risen 16% over the past three years, which is below market performance. Over the past year, the stock price has risen, but only by 1.7%.

Now, it’s worth looking at company fundamentals as well, as this will help us determine whether the long-term shareholder return has matched the performance of the underlying business.

See our latest analysis for DKSH Holding

Although the efficient markets hypothesis continues to be taught by some, it has been proven that markets are dynamic systems that are too reactive and that investors are not always rational. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

In the three years of share price growth, DKSH Holding has actually seen its earnings per share (EPS) fall by 4.7% annually.

Companies don’t always focus on short-term EPS growth, and looking at how the share price has reacted, we don’t think EPS is the most important metric for DKSH Holding at the moment. Since the change in EPS doesn’t seem to correlate with the change in share price, it’s worth taking a look at other metrics.

The 1.8% revenue drop is as disappointing as some politicians. The only thing that is clear is that there is a weak correlation between DKSH Holding’s stock price and its historical fundamentals. Further research may be required!

The graph below illustrates the evolution of income and revenue over time (reveal the exact values ​​by clicking on the image).

SWX: DKSH Earnings and Revenue Growth February 9, 2022

We know that DKSH Holding has recently improved its results, but what does the future hold? If you are considering buying or selling shares of DKSH Holding, you should check out this free report showing analyst earnings forecast.

What about dividends?

It is important to consider the total shareholder return, as well as the stock price return, for a given stock. The TSR incorporates the value of any spin-offs or discounted capital increases, as well as any dividends, based on the assumption that dividends are reinvested. It can be said that the TSR gives a more complete picture of the return generated by a stock. It turns out that DKSH Holding’s TSR for the past 3 years was 28%, which exceeds the share price return mentioned earlier. The dividends paid by the company thus inflated the total return to shareholders.

A different perspective

DKSH Holding’s shareholding increased by 4.5% over the year (even dividends included). But this yield is lower than the market. The silver lining is that the gain was actually better than the average annual return of 1.3% per year over five years. This suggests that the business could improve over time. Is DKSH Holding cheap compared to other companies? These 3 assessment metrics might help you decide.

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on CH stock exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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