These days, it’s easy to just buy an index fund, and your returns should (roughly) match the market. But you can do better than that by choosing better-than-average stocks (as part of a diversified portfolio). For example, the Israel Shipyards Industries Ltd The share price (TLV: ISHI) has risen 48% over the past year, clearly outpacing the market return by around 39% (excluding dividends). If he can maintain this outperformance over the long term, investors will do very well! We’ll have to follow Israel Shipyards Industries for a while to get a better idea of ​​where its stock price is going, as it has not been listed for a particularly long time.

The past week has turned out to be lucrative for investors in Israel Shipyards Industries, so let’s see if fundamentals have driven the company’s year-over-year performance.

Check out our latest review for Israel Shipyards Industries

It is undeniable that markets are sometimes efficient, but prices do not always reflect the underlying business performance. An imperfect but simple way to examine how a company’s market perception has changed is to compare the evolution of earnings per share (EPS) with the movement of the share price.

Over the past year, Israel Shipyards Industries increased its earnings per share (EPS) by 19%. This EPS growth is significantly lower than the 48% rise in the share price. This indicates that the market is now more bullish on the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see more detail).

It might be worth taking a look at our free Israel Shipyards Industries profit, revenue and cash flow report.

What about dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. It turns out that Israel Shipyards Industries’ TSR over the past year was 50%, which exceeds the share price return mentioned earlier. And there’s no price guessing that dividend payments largely explain the discrepancy!

A different perspective

It is nice to see that Israel Shipyards Industries shareholders have gained 50% over the past year including dividends. A substantial part of that gain came in the past three months, with the stock rising 19% during that time. The demand for the stock of several parts pushes the price up; word might spread about its virtues as a business. 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. Nevertheless, be aware that Israel Shipyards Industries shows 1 warning sign in our investment analysis , you must know…

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