Yahoo Finance Alpha Metallurgical Resources' (NYSE:AMR) earnings growth rate lags the 54% CAGR delivered to shareholders
It might be of some concern to shareholders to see the Alpha Metallurgical Resources, Inc. (NYSE:AMR) share price down 16% in the last month. But that doesn't change the fact that the returns over the last half decade have been spectacular. In fact, during that period, the share price climbed 728%. Impressive! Arguably, the recent fall is to be expected after such a strong rise. Only time will tell if there is still too much optimism currently reflected in the share price. It really delights us to see such great share price performance for investors.
Since the long term performance has been good but there's been a recent pullback of 8.0%, let's check if the fundamentals match the share price.
See our latest analysis for Alpha Metallurgical Resources
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the last half decade, Alpha Metallurgical Resources became profitable. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
It might be well worthwhile taking a look at our free report on Alpha Metallurgical Resources' earnings, revenue and cash flow.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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, Alpha Metallurgical Resources' TSR for the last 5 years was 772%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We're pleased to report that Alpha Metallurgical Resources shareholders have received a total shareholder return of 41% over one year. And that does include the dividend. Having said that, the five-year TSR of 54% a year, is even better. It's always interesting to track share price performance over the longer term. But to understand Alpha Metallurgical Resources better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Alpha Metallurgical Resources 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 American 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.
