Centum Electronics Limited (NSE: CENTUM) Shareholders should be happy to see the stock price rise 11% last week. But if you look at the last five years, the returns have not been good. After all, the stock price fell 21% during that time, significantly underperforming the market.

With the stock up 11% last week but long-term shareholders still in the red, let’s see what the fundamentals can tell us.

Check out our latest analysis for Centum Electronics

Given that Centum Electronics has posted losses over the past twelve months, we think the market is likely more focused on revenue and revenue growth, at least for now. Generally speaking, companies without profits should increase their revenue every year, and at a good pace. Indeed, it is difficult to be sure that a business will be sustainable if revenue growth is negligible and it never makes a profit.

In five years, Centum Electronics has increased its turnover by 1.5% per year. It’s far from impressive considering all the money he loses. Given this fairly weak revenue growth (and lack of earnings), it’s not particularly surprising to see the stock drop 4% (annualized) in the same time frame. The key question is whether the company can reach profitability, and beyond, without problems. Shareholders will want the company to get closer to profitability if it can’t grow revenue faster.

The graph below illustrates the evolution of income and income over time (reveal the exact values ​​by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive chart.

What about dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price performance. TSR is a calculation of return that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of all discounted capital raisings and spinoffs. So for companies that pay a generous dividend, the TSR is often much higher than the stock price return. It turns out that Centum Electronics’ TSR for the last 5 years was -19%, which exceeds the share price return mentioned earlier. And there’s no price guessing that dividend payouts largely explain the divergence!

A different perspective

Centum Electronics shareholders earned a total return of 16% during the year. But it was below the market average. But at least it’s still a gain! Over five years, the TSR has been a reduction of 4% per year, over five years. Activity may well stabilize. It is always interesting to follow the evolution of the share price over the long term. But to better understand Centum Electronics, we need to consider many other factors. Even so, know that Centum Electronics shows 5 warning signs in our investment analysis and 2 of them concern…

But note: Centum Electronics may not be the best stock to buy. So take a look at this free list of interesting companies with past earnings growth (and new growth forecasts).

Please note that the market returns quoted in this article reflect the average market-weighted returns of the stocks currently trading on the IN exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.