By buying an index fund, you can easily match the market’s returns. But many of us dare to dream of greater returns and build a portfolio ourselves. Just look at Kyushu Electric Power Company, established (TSE:9508), which has risen 92% in three years, easily beating market returns of 43% (excluding dividends).

Let’s take a look at the underlying fundamentals of the past 3 years and see if they keep pace with shareholder returns.

View our latest analysis for Kyushu Electric Power Company

In his essay The super investors of Graham-and-Doddsville Warren Buffett described how stock prices do not always rationally reflect the value of a company. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

During three years of share price growth, Kyushu Electric Power Company went from a loss to a profit. That would generally be considered positive, so we expect the share price to go up.

The company’s earnings per share (over time) is shown in the image below (click to see the exact numbers).

We know that Kyushu Electric Power Company has improved its profits over the past three years, but what does the future hold? free An interactive report on Kyushu Electric Power Company’s balance sheet strength is a good starting point if you want to investigate the stock further.

What about dividends?

In addition to measuring the share price return, investors should also consider the total shareholder return (TSR). 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. The TSR is said to give a more comprehensive picture of the returns generated by a stock. Coincidentally, Kyushu Electric Power Company’s TSR over the past 3 years was 105%, which is higher than the share price return mentioned earlier. And there’s no prize for guessing that the dividend payments largely explain the divergence!

a different perspective

It is good to see that Kyushu Electric Power Company shareholders have received a total return of 83% over the last year. Of course, that includes the dividend. That return is better than the annual TSR over five years, which is 12%. As such, it seems that sentiment around the company has been positive of late. Someone with an optimistic perspective might view the recent improvement in TSR as an indication that the company itself is getting better over time. I find it very interesting to look at the share price over the long term as a proxy for business performance. But to really get insight, we need to consider other information as well. To achieve that goal, you need to know more about the 4 warning signs We have detected an outage at Kyushu Electric Power Company (including 2 that are potentially serious).

If you’re like me, you’ll… not this is what i want to miss free list of undervalued small caps that are being bought by insiders.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Japanese exchanges.

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This article from Simply Wall St is general in nature. We comment solely on historical data and analyst forecasts, using an objective methodology. Our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any shares and does not take into account your objectives or financial situation. We aim to provide you with a long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in the shares mentioned.

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