Investors can buy low cost index fund if they want to receive the average market return. But if you invest in individual stocks, some are likely to underperform. Unfortunately for shareholders, while the Uni-President China Holdings Ltd (HKG:220) share price is up 29% in the last three years, that falls short of the market return. Zooming in, the stock is up a respectable 19% in the last year.

View our latest analysis for Uni-President China Holdings

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While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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).

Uni-President China Holdings was able to grow its EPS at 7.3% per year over three years, sending the share price higher. We note that the 8.8% yearly (average) share price gain isn’t too far from the EPS growth rate. Coincidence? Probably not. This suggests that sentiment and expectations have not changed drastically. Rather, the share price has approximately tracked EPS growth.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that Uni-President China Holdings has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Uni-President China Holdings the TSR over the last 3 years was 33%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It’s nice to see that Uni-President China Holdings shareholders have received a total shareholder return of 22% over the last year. That’s including the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5.1% per year), it would seem that the stock’s performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Before forming an opinion on Uni-President China Holdings you might want to consider these 3 valuation metrics.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.