It hasn't been the best quarter for Yunnan Energy Investment Co., Ltd. (SZSE:002053) shareholders, since the share price has fallen 15% in that time. But that doesn't change the fact that the returns over the last five years have been pleasing. It has returned a market beating 49% in that time.

Since the stock has added CN¥580m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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, Yunnan Energy Investment achieved compound earnings per share (EPS) growth of 16% per year. This EPS growth is higher than the 8% average annual increase in the share price. So one could conclude that the broader market has become more cautious towards the stock.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that Yunnan Energy Investment has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Yunnan Energy Investment stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Yunnan Energy Investment, it has a TSR of 54% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that Yunnan Energy Investment shareholders have received a total shareholder return of 5.1% over one year. And that does include the dividend. Having said that, the five-year TSR of 9% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. It's always interesting to track share price performance over the longer term. But to understand Yunnan Energy Investment better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Yunnan Energy Investment you should be aware of, and 2 of them are significant.

We will like Yunnan Energy Investment better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 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.