The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But if you buy a stake in a really great company, you can still than double your money. For example TVS Motor Company Limited (NSE: TVSMOTOR) The share price is 131% higher than it was three years ago. This kind of return is solid like granite. The 24% increase in the last three months was also pleasant for shareholders.
So let’s take a look at the fundamental foundations over the past 3 years and see if they have moved steadily with shareholder returns.
Check chances and dangers in the IN Auto industry.
It cannot be denied that markets are efficient at times, but prices do not always reflect core business outcomes. By comparing earnings per share (EPS) and share price movements over time, we can sense how investor sentiment towards the company has changed over time.
TVS Motor was able to increase its EPS by 16% per annum for three years, which resulted in an increase in the share price. This increase in EPS is lower than the 32% average annual increase in the share price. It can therefore be assumed that the market has a better opinion of the business than three years ago. It is not uncommon for the market to re-price stocks after several years of growth. This optimism is also reflected in the rather generous P / E ratio of 49.80.
You can see how the EPS has changed over time in the image below (click on the graph to see the exact values).
We know that TVS Motor has recently improved its financial results, but will it increase its revenues? Check if analysts believe TVS Motor will increase revenues in the future.
What about dividends?
It is important to consider the total shareholder return as well as the share price return for any given share. While the return on the share price only reflects the change in the share price, the TSR includes the value of the dividends (assuming they have been reinvested) and the benefits of any discounted capital raising or spin-off. Arguably, the TSR gives a more complete picture of the return generated by stocks. Note that for TVS Motor, TSR has been 136% in the last 3 years, which is better than the aforementioned return on the share price. This is largely due to the dividend payment!
Good to see TVS Motor rewarded shareholders with a 74% total return to shareholders over the past twelve months. Of course, this includes the dividend. This profit is better than the five-year annual TSR of 10%. Therefore, it seems that the mood around the company has been positive lately. At best, this could indicate real business momentum, meaning now might be a great time to dig deeper. While it is worth considering the various effects that market conditions can have on the share price, there are other factors that are even more important. Consider risk, for example. Every company has them, and we’ve noticed 1 warning sign for TVS engine you should know.
Of course The TVS engine may not be the best stock to buy!. So you may want to see it free collection of growth stocks.
Keep in mind that the market yields quoted in this article reflect the market-weighted average returns on stocks currently traded on the IN exchanges.
The pricing is complex, but we help simplify it.
Find out if TVS engine is potentially overvalued or underestimated by checking our comprehensive analysis, which includes: fair value estimates, risks and warnings, dividends, insider trading and financial condition.
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This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our goal is to deliver long-term, targeted analysis based on fundamental data. Please note that our analysis may not take into account the latest price announcements or qualitative material from companies. Simply Wall St does not hold any position in any of the listed shares.