Investis Holding’s (VTX: IREN) CAGR of 14% outpaced the company’s earnings growth over the same five-year period

Shareholders might be concerned that the Investis Holding SA (VTX:IREN) share price down 12% over the past month. Looking further, the stock has generated good earnings over five years. It returned a market beating 67% during that time.

Given that the stock has added 76 million francs to its market capitalization in the last week alone, let’s see if the underlying performance has generated any long-term returns.

Discover our latest analysis for Investis Holding

In his test The Graham-and-Doddsville super-investors Warren Buffett has described how stock prices don’t always rationally reflect a company’s value. An imperfect but simple way to examine the evolution of a company’s perception by the market is to compare the evolution of earnings per share (EPS) with the evolution of the share price.

In half a decade, Investis Holding has managed to grow its earnings per share by 26% per year. The EPS growth is more impressive than the annual share price gain of 11% over the same period. One could therefore conclude that the broader market has become more cautious towards the stock. This cautious sentiment is reflected in its (rather low) P/E ratio of 6.18.

The graph below illustrates the evolution of EPS over time (reveal the exact values ​​by clicking on the image).

SWX: Growth in earnings per share IREN October 19, 2022

It might be interesting to take a look at our free Investis Holding earnings, 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 performance. TSR is a calculation of return that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of all discounted capital raisings and spinoffs. It’s fair to say that the TSR gives a more complete picture of stocks that pay a dividend. In the case of Investis Holding, it has a TSR of 94% over the last 5 years. This exceeds the performance of its share price that we mentioned earlier. This is largely the result of its dividend payments!

A different perspective

While it is never pleasant to suffer a loss, Investis Holding shareholders can take comfort in the fact that, including dividends, their loss of 6.7% over the last twelve months was not as serious than the loss of about 13% in the market. Of course, the long-term returns are much more important, and the good news is that over five years, the stock has returned 14% for each year. At best, the past year is only a temporary breach on the path to a brighter future. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. Like risks, for example. Every business has them, and we’ve spotted 4 warning signs for Investis Holding (including 2 a little unpleasant!) to know.

Sure, you might find a fantastic investment by 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 average market-weighted returns of stocks currently trading on CH stock exchanges.

Valuation is complex, but we help make it simple.

Find out if Invested Holding is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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