Stock pickers typically look for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a boost. For example, the ASR Nederland SA The share price (AMS: ASRNL) has risen 80% over the past 5 years, significantly outperforming the market return by around 54% (ignoring dividends). However, the most recent returns haven’t been that impressive, with the stock only returning 31% last year including dividends.

So let’s assess the underlying fundamentals over the past 5 years and see if they have moved at the same pace as shareholder returns.

See our latest review for ASR Nederland

In his essay Graham-and-Doddsville super-investors Warren Buffett described how stock prices don’t always rationally reflect a company’s value. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

Over the five years of share price growth, ASR Nederland has achieved compound earnings per share (EPS) growth of 9.9% per year. This EPS growth is slower than the share price growth of 12% per year, over the same period. So it’s fair to assume that the market has a better opinion of the company than it did five years ago. This isn’t necessarily surprising given the track record of five-year earnings growth.

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

We know ASR Nederland has improved its results lately, but will it increase its revenues? You could check that out free report showing analysts’ earnings forecasts.

What about dividends?

In addition to measuring stock price performance, investors should also consider the total shareholder return (TSR). TSR is a yield calculation that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of any discounted capital increase and spin-off. Arguably, the TSR gives a more complete picture of the return generated by a stock. In the case of ASR Nederland, it has a TSR of 138% for the last 5 years. This exceeds its share price return that we mentioned earlier. The dividends paid by the company thus boosted the total shareholder return.

A different perspective

It is good to see that ASR Nederland has rewarded its shareholders with a total shareholder return of 31% over the past twelve months. This includes the dividend. As the 1-year TSR is better than the 5-year TSR (the latter standing at 19% per year), it seems that the performance of the stock has improved in recent times. At the best of times, this can portend real business momentum, meaning that now may be a good time to dig deep. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider, for example, the ever-present specter of investment risk. We have identified 1 warning sign with ASR Nederland, and understanding them should be part of your investment process.

Sure, you might find a fantastic investment looking elsewhere. So take a look at this free list of companies that we believe will increase their profits.

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

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.