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 BHB Brauholding Bayern-Mitte AG (FRA:B9B) shareholders have enjoyed a 19% share price rise over the last half decade, well in excess of the market decline of around 13% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 1.3% in the last year , including dividends .

See our latest analysis for BHB Brauholding Bayern-Mitte

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 five years of share price growth, BHB Brauholding Bayern-Mitte achieved compound earnings per share (EPS) growth of 87% per year. This EPS growth is higher than the 3.5% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.

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

Dive deeper into BHB Brauholding Bayern-Mitte's key metrics by checking this interactive graph of BHB Brauholding Bayern-Mitte's earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, BHB Brauholding Bayern-Mitte's TSR for the last 5 years was 32%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that BHB Brauholding Bayern-Mitte shareholders have received a total shareholder return of 1.3% over the last year. Of course, that includes the dividend. However, that falls short of the 5.7% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for BHB Brauholding Bayern-Mitte you should know about.

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 DE exchanges.

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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. 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. Thank you for reading.