Yahoo Finance Investing in Deutsche Bank (ETR:DBK) five years ago would have delivered you a 33% gain
When we invest, we're generally looking for stocks that outperform the market average. And the truth is, you can make significant gains if you buy good quality businesses at the right price. For example, long term Deutsche Bank Aktiengesellschaft (ETR:DBK) shareholders have enjoyed a 24% share price rise over the last half decade, well in excess of the market decline of around 5.6% (not including dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 7.5% , including dividends .
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
View our latest analysis for Deutsche Bank
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the five years of share price growth, Deutsche Bank moved from a loss to profitability. That's generally thought to be a genuine positive, so we would expect to see an increasing share price.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We know that Deutsche Bank has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Deutsche Bank stock, you should check out this FREE detailed report on its balance sheet.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Deutsche Bank the TSR over the last 5 years was 33%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We're pleased to report that Deutsche Bank shareholders have received a total shareholder return of 7.5% over one year. That's including the dividend. That's better than the annualised return of 6% 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. It's always interesting to track share price performance over the longer term. But to understand Deutsche Bank better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Deutsche Bank .
We will like Deutsche Bank better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German 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.
