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    Despite the downward trend in earnings at KWS SAAT SE KGaA (ETR:KWS) the stock lifts 5.3%, bringing one-year gains to 23%

    Simply Wall St·01/03/2026 07:25:04
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    These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. To wit, the KWS SAAT SE & Co. KGaA (ETR:KWS) share price is 21% higher than it was a year ago, much better than the market return of around 15% (not including dividends) in the same period. So that should have shareholders smiling. However, the longer term returns haven't been so impressive, with the stock up just 7.7% in the last three years.

    The past week has proven to be lucrative for KWS SAAT SE KGaA investors, so let's see if fundamentals drove the company's one-year performance.

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    While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

    Over the last twelve months, KWS SAAT SE KGaA actually shrank its EPS by 14%.

    This means it's unlikely the market is judging the company based on earnings growth. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

    We doubt the modest 1.8% dividend yield is doing much to support the share price. KWS SAAT SE KGaA's revenue actually dropped 3.5% over last year. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

    You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

    earnings-and-revenue-growth
    XTRA:KWS Earnings and Revenue Growth January 3rd 2026

    Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

    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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for KWS SAAT SE KGaA the TSR over the last 1 year was 23%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

    A Different Perspective

    It's good to see that KWS SAAT SE KGaA has rewarded shareholders with a total shareholder return of 23% in the last twelve months. And that does include the dividend. That's better than the annualised return of 1.2% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before forming an opinion on KWS SAAT SE KGaA you might want to consider these 3 valuation metrics.

    But note: KWS SAAT SE KGaA may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

    Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges.