Nasdaq
華爾街日報Grupo Comercial Chedraui. de's (BMV:CHDRAUIB) five-year total shareholder returns outpace the underlying earnings growth
It hasn't been the best quarter for Grupo Comercial Chedraui, S.A.B. de C.V. (BMV:CHDRAUIB) shareholders, since the share price has fallen 12% in that time. But that doesn't undermine the fantastic longer term performance (measured over five years). Indeed, the share price is up a whopping 303% in that time. Arguably, the recent fall is to be expected after such a strong rise. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price.
While the stock has fallen 3.0% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.
During five years of share price growth, Grupo Comercial Chedraui. de achieved compound earnings per share (EPS) growth of 24% per year. This EPS growth is slower than the share price growth of 32% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
This free interactive report on Grupo Comercial Chedraui. de's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Grupo Comercial Chedraui. de's TSR for the last 5 years was 332%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
Grupo Comercial Chedraui. de shareholders are up 2.3% for the year (even including dividends). But that return falls short of the market. On the bright side, the longer term returns (running at about 34% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. Before forming an opinion on Grupo Comercial Chedraui. de you might want to consider these 3 valuation metrics.
Of course Grupo Comercial Chedraui. de 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 Mexican exchanges.
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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.