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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For example, the AVANGARD Joint Stock BANK (MCX:AVAN) share price has soared 124% in the last three years. Most would be happy with that. Also pleasing for shareholders was the 28% gain in the last three months.
Check out our latest analysis for AVANGARD BANK
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During three years of share price growth, AVANGARD BANK achieved compound earnings per share growth of 24% per year. This EPS growth is lower than the 31% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did three years ago. It is quite common to see investors become enamoured with a business, after a few years of solid progress.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on AVANGARD BANK'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. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of AVANGARD BANK, it has a TSR of 137% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
It's nice to see that AVANGARD BANK shareholders have gained 60% (in total) over the last year. That includes the value of the dividend. So this year's TSR was actually better than the three-year TSR (annualized) of 33%. The improving returns to shareholders suggests the stock is becoming more popular with time. Importantly, we haven't analysed AVANGARD BANK's dividend history. This free visual report on its dividends is a must-read if you're thinking of buying.