Beijing Sifang AutomationLtd's (SHSE:601126) five-year earnings growth trails the 27% YoY shareholder returns

Simply Wall St · 5d ago

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of Beijing Sifang Automation Co.,Ltd (SHSE:601126) stock is up an impressive 158% over the last five years. It's even up 4.2% in the last week. But this might be partly because the broader market had a good week last week, gaining 2.4%.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

See our latest analysis for Beijing Sifang AutomationLtd

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 five years of share price growth, Beijing Sifang AutomationLtd achieved compound earnings per share (EPS) growth of 29% per year. The EPS growth is more impressive than the yearly share price gain of 21% over the same period. So it seems the market isn't so enthusiastic about the stock these days.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
SHSE:601126 Earnings Per Share Growth March 10th 2025

We know that Beijing Sifang AutomationLtd has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Beijing Sifang AutomationLtd will grow revenue in the future.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Beijing Sifang AutomationLtd's TSR for the last 5 years was 236%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Beijing Sifang AutomationLtd provided a TSR of 2.7% over the last twelve months. Unfortunately this falls short of the market return. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 27% over five years. Maybe the share price is just taking a breather while the business executes on its growth strategy. It's always interesting to track share price performance over the longer term. But to understand Beijing Sifang AutomationLtd better, we need to consider many other factors. Take risks, for example - Beijing Sifang AutomationLtd has 1 warning sign we think you should be aware of.

But note: Beijing Sifang AutomationLtd may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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