Despite lower profits than five years ago, investors in Container Corporation of India (NSE: CONCOR) are up 74% since then
When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Even better, you’d like to see the stock price rise more than the market average. Corn Container Corporation of India Limited (NSE:CONCOR) fell short of this second goal, with the stock price rising 62% over five years, which is below market performance. However, newer buyers should be pleased with the 45% increase over last year.
Although Container Corporation of India lost ₹42 billion of its market capitalization this week, let’s take a look at its longer-term fundamental trends and see if they have generated any returns.
Check out our latest analysis for Container Corporation of India
While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. One way to look at 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).
Container Corporation of India’s earnings per share are down 0.3% annually, despite strong five-year share price performance.
Looking at these numbers, we would say that the decline in earnings per share is not representative of how the company has changed over the years. Since the change in EPS doesn’t seem to correlate with the change in share price, it’s worth taking a look at other metrics.
The modest 1.0% dividend yield is unlikely to support the stock price. We’re not particularly impressed with the compound annual revenue growth of 2.3% over five years. So it seems that we need to take a closer look at earnings and revenue trends to see how they might influence the stock price.
The graph below illustrates the evolution of income and income over time (reveal the exact values by clicking on the image).
We are pleased to report that the CEO is compensated more modestly than most CEOs of similarly capitalized companies. It’s always worth keeping an eye on CEO compensation, but a more important question is whether the company will grow its profits over the years. You can see what analysts are predicting for Container Corporation of India in this interactive graph of future profit estimates.
What about dividends?
In addition to measuring share price performance, investors should also consider total shareholder return (TSR). While the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital raising or spin-offs. off updated. It can be said that the TSR gives a more complete picture of the return generated by a stock. It turns out that Container Corporation of India’s TSR for the past 5 years was 74%, which exceeds the share price return mentioned earlier. The dividends paid by the company thus inflated the total return to shareholders.
A different perspective
It is pleasing to see that Container Corporation of India shareholders have received a total shareholder return of 47% over the past year. And that includes the dividend. That’s better than the 12% annualized return over half a decade, which implies the company has been doing better recently. Given that the stock price momentum remains strong, it might be worth taking a closer look at the stock lest you miss an opportunity. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. To this end, you should be aware of the 1 warning sign we spotted with Container Corporation of India.
Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of companies that we believe will increase their profits.
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on IN exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.