Tayho Advanced Materials Group (SZSE:002254) stock falls 10% in past week as three-year earnings and shareholder returns continue downward trend

Simply Wall St · 10/16 02:15

Tayho Advanced Materials Group Co., Ltd. (SZSE:002254) shareholders should be happy to see the share price up 18% in the last month. But that is small recompense for the exasperating returns over three years. In that time, the share price dropped 55%. So it's good to see it climbing back up. After all, could be that the fall was overdone.

After losing 10% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Tayho Advanced Materials Group

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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).

Tayho Advanced Materials Group saw its EPS decline at a compound rate of 32% per year, over the last three years. In comparison the 23% compound annual share price decline isn't as bad as the EPS drop-off. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term.

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

earnings-per-share-growth
SZSE:002254 Earnings Per Share Growth October 16th 2024

This free interactive report on Tayho Advanced Materials Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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 Tayho Advanced Materials Group, it has a TSR of -51% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We regret to report that Tayho Advanced Materials Group shareholders are down 39% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 0.6%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 0.5% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Take risks, for example - Tayho Advanced Materials Group has 3 warning signs (and 2 which are concerning) we think you should know about.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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