Buying an index fund makes it easier to closely match market returns. However, if you buy quality companies at attractive prices, portfolio returns can exceed the market’s average returns.just take a look Batu Kawan Berhad (KLSE:BKAWAN) is up 38% over three years, well above the market return of 1.1% (excluding dividends). Meanwhile, recent returns haven’t been great, with shareholders only up 1.9%, including the dividend.
So let’s find out if the company’s long-term performance is in line with the underlying business progress.
Read our latest analysis on Batu Kawan Berhad.
To paraphrase Benjamin Graham, the market is a voting machine in the short term, but a weighing machine in the long term. One of his ways of looking at how market sentiment has changed over time is by looking at the interaction between a company’s stock price and his earnings per share (EPS).
Batu Kawan Berhad achieved compound earnings growth of 48% per annum during the three-year stock market run. An average annual stock price appreciation of 11% is actually lower than EPS growth. Therefore, the market appears to have moderated growth expectations somewhat. I think the low P/E ratio of 7.56 also reflects the negative sentiment towards the stock.
You can see how the EPS changed over time in the image below (click on the graph to see exact values).
Check out this interactive graph of Batu Kawan Berhad’s earnings, earnings, and cash flow to get a closer look at Batu Kawan Berhad’s key metrics.
What is the dividend?
When looking at return on investment, it’s important to consider the following differences: Total shareholder return (TSR) and stock price returnTSR incorporates the value of spin-off or discounted capital raising along with dividends, based on the assumption that dividends are reinvested. Arguably, the TSR is a more comprehensive representation of the returns generated by equities. For Batu Kawan Berhad, TSR over the last three years is 51%. This outperforms the aforementioned stock return. This is primarily a result of dividend payments!
another point of view
Batu Kawan Berhad’s shareholders made a gross profit of 1.9% for the year. But its returns are below the market. This is perhaps a good sign that the company has an even better long-term track record, providing shareholders with his 6% annual TSR over five years. The stock may be taking a breather while the business executes its growth strategy. It’s always interesting to track stock performance over the long term. But to better understand Batu Kawan Berhad, many other factors must be considered. For example, consider risk.All companies have them and we found Two Warning Signs of Batu Kawan Berhad you should know about
For those who like to search investment win this freedom A list of growing companies that recently made insider acquisitions could be just the ticket.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the MY exchange.
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This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst projections using only unbiased methodologies and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Is not …
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