Canada markets closed
  • S&P/TSX

    19,532.78
    -122.14 (-0.62%)
     
  • S&P 500

    3,936.97
    -65.90 (-1.65%)
     
  • DOW

    32,030.11
    -530.49 (-1.63%)
     
  • CAD/USD

    0.7287
    -0.0008 (-0.11%)
     
  • CRUDE OIL

    70.07
    -0.83 (-1.17%)
     
  • Bitcoin CAD

    37,255.93
    -1,207.08 (-3.14%)
     
  • CMC Crypto 200

    593.68
    -22.27 (-3.62%)
     
  • GOLD FUTURES

    1,969.10
    +19.50 (+1.00%)
     
  • RUSSELL 2000

    1,727.36
    -50.38 (-2.83%)
     
  • 10-Yr Bond

    3.5000
    -0.1060 (-2.94%)
     
  • NASDAQ futures

    12,708.00
    +1.00 (+0.01%)
     
  • VOLATILITY

    22.26
    +0.88 (+4.12%)
     
  • FTSE

    7,566.84
    +30.62 (+0.41%)
     
  • NIKKEI 225

    27,466.61
    +520.94 (+1.93%)
     
  • CAD/EUR

    0.6706
    -0.0064 (-0.95%)
     

Those who invested in Straumann Holding (VTX:STMN) five years ago are up 52%

When we invest, we're generally looking for stocks that outperform the market average. And in our experience, buying the right stocks can give your wealth a significant boost. To wit, the Straumann Holding share price has climbed 47% in five years, easily topping the market decline of 0.5% (ignoring dividends).

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for Straumann Holding

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

During five years of share price growth, Straumann Holding achieved compound earnings per share (EPS) growth of 15% per year. The EPS growth is more impressive than the yearly share price gain of 8% over the same period. Therefore, it seems the market has become relatively pessimistic about the company.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

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 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. We note that for Straumann Holding the TSR over the last 5 years was 52%, 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

While the broader market lost about 18% in the twelve months, Straumann Holding shareholders did even worse, losing 45% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 9%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Straumann Holding better, we need to consider many other factors. Take risks, for example - Straumann Holding has 1 warning sign we think 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 CH exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here