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It hasn't been the best quarter for PGG Wrightson Limited (NZSE:PGW) shareholders, since the share price has fallen 14% in that time. But that doesn't change the fact that the returns over the last year have been pleasing. Looking at the full year, the company has easily bested an index fund by gaining 29%.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for PGG Wrightson
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
PGG Wrightson was able to grow EPS by 157% in the last twelve months. This EPS growth is significantly higher than the 29% increase in the share price. Therefore, it seems the market isn't as excited about PGG Wrightson as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 11.79.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We know that PGG Wrightson has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of PGG Wrightson, it has a TSR of 41% for the last 1 year. 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 good to see that PGG Wrightson has rewarded shareholders with a total shareholder return of 41% in the last twelve months. That's including the dividend. That's better than the annualised return of 21% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 4 warning signs for PGG Wrightson you should be aware of, and 1 of them is a bit unpleasant.