Investing in Taiwan Cooperative Finance Holdings (TWSE:5880) five years ago would have given you a 70% return.

If you buy and hold a stock for many years, you hope to make a profit. Better yet, you’d like to see the stock price rise more than the market average. But Taiwan Cooperative Financial Holding Company Co., Ltd. (TWSE:5880) failed to achieve that second goal, with the share price up 45% in five years, underperforming the market return. Over the last twelve months the share price has risen by a very respectable 5.1%.

So let’s evaluate the fundamentals over the last 5 years and see if they have kept pace with shareholder returns.

Check out our latest analysis for Taiwan Cooperative Finance Holding

Although some continue to teach the efficient markets hypothesis, it has been proven that markets are overreactive dynamic systems and investors are not always rational. 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.

Over half a century, Taiwan Cooperative Finance Holding has managed to increase earnings per share by 2.2% per year. This EPS growth is slower than the share price growth of 8% per year over the same period. This suggests that market participants currently hold the company in high regard. This is not surprising given its five-year track record of revenue growth.

You can see below how earnings per share have changed over time (you can see the exact values ​​by clicking on the image).

Dive deeper into Taiwan Cooperative Finance Holding’s key metrics by checking out this interactive graph of Taiwan Cooperative Finance Holdings’ earnings, revenue and cash flow.

What about dividends?

When considering investment returns, it is important to consider the difference between total shareholder return (TSR) and stock return. While 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. It’s fair to say that the TSR gives a more complete picture of the stocks that pay their dividend. In the case of Taiwan Cooperative Finance Holdings, its TSR is 70% for the last 5 years. This exceeds the stock return we mentioned earlier. The dividends paid by the company thus increased general shareholder income.

Another point of view

Shares of Taiwan Cooperative Finance Holdings are up 7.8% over the year (even including dividends). Unfortunately, this is not in line with market returns. If we look back five years, the return is even better: 11% per year for five years. It may well be a business worth keeping an eye on given its continued positive reception in the market over time. It’s always interesting to track stock price performance over the long term. But to better understand Taiwan Cooperative Finance Holding, we need to consider many other factors. Take, for example, the ever-present specter of investment risk. We’ve spotted 1 warning sign. with Taiwan Cooperative Finance Holding and understanding them should be part of your investment process.

Certainly Taiwan Cooperative Finance Holding May Not Be the Best Buy. So you might want to see this for 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 Taiwan exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only objective methodology, and our articles are not intended to provide financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. We strive to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis may not factor in recent price-sensitive company announcements or qualitative content. Wall Street simply doesn’t have a position in any of the stocks mentioned.