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Tokai Tokyo Financial Holdings (TSE:8616) stock performs better than its underlying earnings growth over last five years

Simply Wall St · 6d 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 example, the Tokai Tokyo Financial Holdings, Inc. (TSE:8616) share price has soared 121% in the last half decade. Most would be very happy with that. It's also good to see the share price up 22% over the last quarter. But this could be related to the strong market, which is up 9.0% in the last three months.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, Tokai Tokyo Financial Holdings managed to grow its earnings per share at 21% a year. This EPS growth is higher than the 17% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
TSE:8616 Earnings Per Share Growth January 7th 2026

It is of course excellent to see how Tokai Tokyo Financial Holdings has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Tokai Tokyo Financial Holdings stock, you should check out this FREE detailed report on its balance sheet.

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. As it happens, Tokai Tokyo Financial Holdings' TSR for the last 5 years was 191%, 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

It's good to see that Tokai Tokyo Financial Holdings has rewarded shareholders with a total shareholder return of 56% in the last twelve months. And that does include the dividend. That gain is better than the annual TSR over five years, which is 24%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Tokai Tokyo Financial Holdings better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Tokai Tokyo Financial Holdings .

But note: Tokai Tokyo Financial Holdings 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 Japanese exchanges.