Buying a low-cost index fund will get you the average market return. But if you invest in individual stocks, some are likely to underperform. That's what has happened with the Jiangsu Sanfame Polyester Material Co.,Ltd. (SHSE:600370) share price. It's up 21% over three years, but that is below the market return. Zooming in, the stock is up a respectable 19% in the last year.

Since it's been a strong week for Jiangsu Sanfame Polyester MaterialLtd shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Jiangsu Sanfame Polyester MaterialLtd

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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Jiangsu Sanfame Polyester MaterialLtd was able to grow its EPS at 46% per year over three years, sending the share price higher. The average annual share price increase of 6% is actually lower than the EPS growth. So one could reasonably conclude that the market has cooled on the stock.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Jiangsu Sanfame Polyester MaterialLtd's key metrics by checking this interactive graph of Jiangsu Sanfame Polyester MaterialLtd's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Jiangsu Sanfame Polyester MaterialLtd the TSR over the last 3 years was 32%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's good to see that Jiangsu Sanfame Polyester MaterialLtd has rewarded shareholders with a total shareholder return of 25% in the last twelve months. And that does include the dividend. Notably the five-year annualised TSR loss of 2% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Jiangsu Sanfame Polyester MaterialLtd better, we need to consider many other factors. Even so, be aware that Jiangsu Sanfame Polyester MaterialLtd is showing 4 warning signs in our investment analysis , and 1 of those can't be ignored...

Of course Jiangsu Sanfame Polyester MaterialLtd 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.