Rail Vikas Nigam’s (NSE:RVNL) three-year earnings growth lags behind excellent shareholder returns

After buying a company’s stock (assuming no leverage), the worst possible outcome is losing all your invested money. But in contrast, you can make a lot of profit. more If the company is doing well, it will exceed 100%. in short, Rail Vikas Nigam Limited (NSE:RVNL) shares are up 186% over the past three years. Most people will be happy with that. And to please our shareholders, we’ve made 90% returns in the last three months.

After the big rally over the past week, it’s worth checking to see if long-term returns came from improving fundamentals.

View the latest analysis for Rail Vikas Nigam

in his essay Graham and Dodsville superinvestor Warren Buffett explained that stock prices don’t always reasonably reflect the value of a business. One imperfect but simple way to look at how the market’s perception of a company has changed is to compare earnings per share (EPS) changes to stock price movements.

Rail Vikas Nigam was able to grow its EPS by 17% annually over three years, boosting its share price. This EPS growth is below the stock’s average annual gain of 42%. This indicates that the market is feeling more optimistic about the stock after years of progress. Given its three-year track record of revenue growth, this is not necessarily surprising.

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

We know that Rail Vikas Nigam has improved their earnings recently, but will they increase? Check this out if you’re interested freedom A report showing consensus revenue projections.

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 is an earnings calculation that accounts for the value of cash dividends (assuming dividends received are reinvested) and the calculated value of discounted capital raisings and spin-offs. As such, for companies that pay large dividends, the TSR is often much higher than the stock price return. Rail Vikas Nigam has a TSR of 233% over the past three years, outperforming the stock return above. This is primarily a result of dividend payments!

another point of view

The good news is that Rail Vikas Nigam posted a total shareholder return of 104% last year. This includes the dividend value. This increase actually exceeds the (annual) 49% TSR generated over the three years. Given its solid earnings track record in various timeframes, it might be worth adding Rail Vikas Nigam to your watchlist. While it’s worth considering the various effects market conditions have on stock prices, there are other factors that are even more important. Like risk, for example.All companies have them and we found 3 Warning Signs of Rail Vikas Nigam (one of which should not be ignored!) you need to know.

of course, You can find great investments by looking elsewhere. Let’s take a look at this freedom A list of companies whose revenue is expected to increase.

Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on the IN 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 …