For many, the main point of investing is to generate higher returns than the overall market. But in any portfolio, there will be mixed results between individual stocks. So we wouldn't blame long term Dah Sing Banking Group Limited (HKG:2356) shareholders for doubting their decision to hold, with the stock down 40% over a half decade. And the share price decline continued over the last week, dropping some 6.5%. However, this move may have been influenced by the broader market, which fell 3.8% in that time.

Since Dah Sing Banking Group has shed HK$633m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

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).

Looking back five years, both Dah Sing Banking Group's share price and EPS declined; the latter at a rate of 2.9% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 10% per year, over the period. This implies that the market was previously too optimistic about the stock. The low P/E ratio of 4.26 further reflects this reticence.

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

We know that Dah Sing Banking Group has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Dah Sing Banking Group will grow revenue in the future.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Dah Sing Banking Group, it has a TSR of -16% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's good to see that Dah Sing Banking Group has rewarded shareholders with a total shareholder return of 41% in the last twelve months. Of course, that includes the dividend. There's no doubt those recent returns are much better than the TSR loss of 3% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Dah Sing Banking Group better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Dah Sing Banking Group .

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