When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Better yet, you'd like to see the share price move up more than the market average. Unfortunately for shareholders, while the JiaoZuo WanFang Aluminum Manufacturing Co., Ltd (SZSE:000612) share price is up 32% in the last five years, that's less than the market return. Unfortunately the share price is down 0.7% in the last year.
Since it's been a strong week for JiaoZuo WanFang Aluminum Manufacturing shareholders, let's have a look at trend of the longer term fundamentals.
See our latest analysis for JiaoZuo WanFang Aluminum Manufacturing
Given that JiaoZuo WanFang Aluminum Manufacturing only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
For the last half decade, JiaoZuo WanFang Aluminum Manufacturing can boast revenue growth at a rate of 5.2% per year. Put simply, that growth rate fails to impress. Like its revenue, its share price gained over the period. The increase of 6% per year probably reflects the modest revenue growth. If profitability is likely in the near term, then this might be one to add to your watchlist.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on JiaoZuo WanFang Aluminum Manufacturing's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for JiaoZuo WanFang Aluminum Manufacturing the TSR over the last 5 years was 37%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!
A Different Perspective
It's nice to see that JiaoZuo WanFang Aluminum Manufacturing shareholders have received a total shareholder return of 0.8% over the last year. And that does include the dividend. Having said that, the five-year TSR of 6% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. While it is well 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 instance, the ever-present spectre of investment risk. We've identified 3 warning signs with JiaoZuo WanFang Aluminum Manufacturing (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.
We will like JiaoZuo WanFang Aluminum Manufacturing better if we see some big insider buys. While we wait, check out this free list of growing companies 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.