It's easy to buy index funds these days, and your returns should (mostly) match the market. But you can do better than that by choosing stocks that are better than the average (as part of a diversified portfolio). In other words, Sunway Construction Group Berhad (KLSE:SUNCON)'s share price is up 76% from a year ago, far better than the market return of around 10% (not including dividends) over the same period. If it can sustain that outperformance over time, investors will do very well. Looking back even further, the stock is up 61% from three years ago.
It's also worth looking at the company's fundamentals here. That's because it helps determine whether long-term shareholder returns are in line with the performance of the underlying business.
Check out our latest analysis for Sunway Construction Group Berhad.
While there is no denying that markets are sometimes efficient, prices do not always reflect underlying company performance. One way he looks at how market sentiment has changed over time is to look at the interaction between a company's stock price and his earnings per share (EPS).
Over the last year, Sunway Construction Group Berhad grew its earnings per share (EPS) by 7.3%. This EPS growth is significantly lower than the 76% increase in the share price. So it's fair to think the market has a higher valuation for this business than it did a year ago.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It might be well worth taking a look at ours free Report on Sunway Construction Group Berhad's earnings, revenue and cash flow.
What will happen to the dividend?
As well as measuring share price return, investors should also consider 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 increases and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that Sunway Construction Group Berhad's TSR over the past year was 81%, which is better than the share price return mentioned above. This is primarily due to dividend payments.
different perspective
It's good to see that Sunway Construction Group Berhad returned a total shareholder return of 81% to shareholders over the last twelve months. And this includes dividends. The stock appears to have performed better recently, as the 1-year TSR is better than his 5-year TSR (the latter coming in at 12% per annum). Optimists might think that the recent improvement in TSR indicates that the business itself is improving over time. I think it's very interesting to look at stock price over the long term as an indicator of business performance. But to really gain insight, you need to consider other information as well. For example, risk.Every company has them and we discovered that 2 warning signs for Sunway Construction Group Berhad (One of them is a little worrying!) You should know.
of course, You may find a great investment if you look elsewhere. So take a look at this free A list of companies with expected revenue growth.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.
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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.
