The main point of investing for the long term is to make money. Better yet, you'd like to see the share price move up more than the market average. But Hong Kong Ferry (Holdings) Company Limited (HKG:50) has fallen short of that second goal, with a share price rise of 18% over five years, which is below the market return. However, if you include the dividends then the return is market beating. The last year has been disappointing, with the stock price down 2.2% in that time.
View our latest analysis for Hong Kong Ferry (Holdings)
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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).
Over half a decade, Hong Kong Ferry (Holdings) managed to grow its earnings per share at 3.3% a year. This EPS growth is remarkably close to the 3.3% average annual increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. Indeed, it would appear the share price is reacting to the EPS.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Hong Kong Ferry (Holdings)'s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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 raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Hong Kong Ferry (Holdings)'s TSR for the last 5 years was 63%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We're pleased to report that Hong Kong Ferry (Holdings) shareholders have received a total shareholder return of 2.0% over one year. That's including the dividend. However, the TSR over five years, coming in at 10% per year, is even more impressive. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. Before forming an opinion on Hong Kong Ferry (Holdings) you might want to consider the cold hard cash it pays as a dividend. This free chart tracks its dividend over time.