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It hasn't been the best quarter for Riverstone Holdings Limited (SGX:AP4) shareholders, since the share price has fallen 15% in that time. But that doesn't change the fact that the returns over the last five years have been pleasing. It has returned a market beating 48% in that time.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
We've discovered 1 warning sign about Riverstone Holdings. View them for free.
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Over half a decade, Riverstone Holdings managed to grow its earnings per share at 17% a year. The EPS growth is more impressive than the yearly share price gain of 8% over the same period. So it seems the market isn't so enthusiastic about the stock these days.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
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. It might be well worthwhile taking a look at our free report on Riverstone Holdings' earnings, revenue and cash flow.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Riverstone Holdings the TSR over the last 5 years was 153%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
It's good to see that Riverstone Holdings has rewarded shareholders with a total shareholder return of 18% in the last twelve months. And that does include the dividend. However, that falls short of the 20% TSR per annum it has made for shareholders, each year, over five years. It's always interesting to track share price performance over the longer term. But to understand Riverstone Holdings better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Riverstone Holdings you should be aware of.