Kuala Lumpur Kepong Berhad's (KLSE:KLK) investors will be pleased with their 3.1% return over the last five years
Ideally, your overall portfolio should beat the market average. But every investor is virtually certain to have both over-performing and under-performing stocks. At this point some shareholders may be questioning their investment in Kuala Lumpur Kepong Berhad (KLSE:KLK), since the last five years saw the share price fall 12%.
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.
Check out our latest analysis for Kuala Lumpur Kepong Berhad
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. 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.
Looking back five years, both Kuala Lumpur Kepong Berhad's share price and EPS declined; the latter at a rate of 0.8% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 2% per year, over the period. So it seems the market was too confident about the business, in the past.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into Kuala Lumpur Kepong Berhad's key metrics by checking this interactive graph of Kuala Lumpur Kepong Berhad's earnings, revenue and cash flow.
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, Kuala Lumpur Kepong Berhad's TSR for the last 5 years was 3.1%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Kuala Lumpur Kepong Berhad shareholders gained a total return of 9.4% during the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 0.6% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand Kuala Lumpur Kepong Berhad better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Kuala Lumpur Kepong Berhad (including 1 which makes us a bit uncomfortable) .
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.