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By buying an index fund, investors can approximate the average market return. But if you choose individual stocks with prowess, you can make superior returns. Just take a look at Kerry Logistics Network Limited (HKG:636), which is up 25%, over three years, soundly beating the market return of 9.3% (not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 8.6% , including dividends .
View our latest analysis for Kerry Logistics Network
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).
During three years of share price growth, Kerry Logistics Network achieved compound earnings per share growth of 33% per year. This EPS growth is higher than the 7.9% average annual increase in the share price. So it seems investors have become more cautious about the company, over time. This cautious sentiment is reflected in its (fairly low) P/E ratio of 5.26.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It is of course excellent to see how Kerry Logistics Network has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Kerry Logistics Network's financial health with this free report on its balance sheet.
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 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. We note that for Kerry Logistics Network the TSR over the last 3 years was 38%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
It's nice to see that Kerry Logistics Network shareholders have received a total shareholder return of 8.6% over the last year. And that does include the dividend. That gain is better than the annual TSR over five years, which is 3.5%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before deciding if you like the current share price, check how Kerry Logistics Network scores on these 3 valuation metrics.