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Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Garden Reach Shipbuilders & Engineers Limited (NSE:GRSE) share price had more than doubled in just one year - up 142%. Also pleasing for shareholders was the 70% gain in the last three months. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
View our latest analysis for Garden Reach Shipbuilders & Engineers
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 Garden Reach Shipbuilders & Engineers grew its earnings per share (EPS) by 87%. This EPS growth is significantly lower than the 142% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it 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's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Garden Reach Shipbuilders & Engineers'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. As it happens, Garden Reach Shipbuilders & Engineers's TSR for the last year was 156%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
Garden Reach Shipbuilders & Engineers boasts a total shareholder return of 156% for the last year (that includes the dividends) . And the share price momentum remains respectable, with a gain of 70% in the last three months. This suggests the company is continuing to win over new investors. Keeping this in mind, a solid next step might be to take a look at Garden Reach Shipbuilders & Engineers's dividend track record. This free interactive graph is a great place to start.