It hasn't been the best quarter for Guiyang Xintian Pharmaceutical Co.,Ltd. (SZSE:002873) shareholders, since the share price has fallen 21% in that time. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 36% during that period.

The past week has proven to be lucrative for Guiyang Xintian PharmaceuticalLtd investors, so let's see if fundamentals drove the company's three-year performance.

View our latest analysis for Guiyang Xintian PharmaceuticalLtd

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During three years of share price growth, Guiyang Xintian PharmaceuticalLtd achieved compound earnings per share growth of 13% per year. We don't think it is entirely coincidental that the EPS growth is reasonably close to the 11% average annual increase in the share price. This suggests that sentiment and expectations have not changed drastically. Quite to the contrary, the share price has arguably reflected the EPS growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Guiyang Xintian PharmaceuticalLtd's key metrics by checking this interactive graph of Guiyang Xintian PharmaceuticalLtd's earnings, revenue and cash flow.

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. As it happens, Guiyang Xintian PharmaceuticalLtd's TSR for the last 3 years was 38%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Guiyang Xintian PharmaceuticalLtd shareholders have gained 25% (in total) over the last year. That includes the value of the dividend. That's better than the annualized TSR of 11% over the last three years. The improving returns to shareholders suggests the stock is becoming more popular with time. 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 Guiyang Xintian PharmaceuticalLtd , and understanding them should be part of your investment process.

Of course Guiyang Xintian PharmaceuticalLtd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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