Yahoo Finance Did You Miss Core-Mark Holding Company's (NASDAQ:CORE) 94% Share Price Gain?
By buying an index fund, investors can approximate the average market return. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, Core-Mark Holding Company, Inc. (NASDAQ:CORE) shareholders have seen the share price rise 94% over three years, well in excess of the market return (55%, not including dividends).
See our latest analysis for Core-Mark Holding Company
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Core-Mark Holding Company was able to grow its EPS at 32% per year over three years, sending the share price higher. This EPS growth is higher than the 25% average annual increase in the share price. So one could reasonably conclude that the market has cooled on the stock.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It is of course excellent to see how Core-Mark Holding Company has grown profits over the years, but the future is more important for shareholders. You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Core-Mark Holding Company's TSR for the last 3 years was 102%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
It's good to see that Core-Mark Holding Company has rewarded shareholders with a total shareholder return of 79% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 0.2% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Core-Mark Holding Company better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Core-Mark Holding Company you should be aware of.
Of course Core-Mark Holding Company may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. 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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