Harvia Oyj's (HEL:HARVIA) five-year earnings growth trails the 39% YoY shareholder returns

Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. For example, the Harvia Oyj (HEL:HARVIA) share price is up a whopping 374% in the last half decade, a handsome return for long term holders. This just goes to show the value creation that some businesses can achieve. It's also up 11% in about a month.

Since it's been a strong week for Harvia Oyj shareholders, let's have a look at trend of the longer term fundamentals.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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, Harvia Oyj achieved compound earnings per share (EPS) growth of 22% per year. This EPS growth is lower than the 37% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.

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

Dive deeper into Harvia Oyj's key metrics by checking this interactive graph of Harvia Oyj'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). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Harvia Oyj the TSR over the last 5 years was 428%, 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 Harvia Oyj has rewarded shareholders with a total shareholder return of 35% in the last twelve months. Of course, that includes the dividend. Having said that, the five-year TSR of 39% a year, is even better. It's always interesting to track share price performance over the longer term. But to understand Harvia Oyj better, we need to consider many other factors. For example, we've discovered 1 warning sign for Harvia Oyj that you should be aware of before investing here.

We will like Harvia Oyj better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.