Yahoo Finance The 29% return delivered to Van Lanschot Kempen's (AMS:VLK) shareholders actually lagged YoY earnings growth
Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. For example, the Van Lanschot Kempen NV (AMS:VLK) share price is up 11% in the last 1 year, clearly besting the market decline of around 8.0% (not including dividends). So that should have shareholders smiling. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
Since the stock has added €131m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
See our latest analysis for Van Lanschot Kempen
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the last year Van Lanschot Kempen grew its earnings per share (EPS) by 109%. It's fair to say that the share price gain of 11% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Van Lanschot Kempen as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 8.41.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
We know that Van Lanschot Kempen has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.
What About Dividends?
As well as 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Van Lanschot Kempen's TSR for the last 1 year was 29%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!
A Different Perspective
Van Lanschot Kempen boasts a total shareholder return of 29% for the last year (that includes the dividends) . And the share price momentum remains respectable, with a gain of 29% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Van Lanschot Kempen better, we need to consider many other factors. Take risks, for example - Van Lanschot Kempen has 1 warning sign we think you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NL exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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