the Wipro Limited (NSE: WIPRO) The stock price had a bad week, falling 10%. But that doesn’t change the fact that shareholders have received very good returns over the past five years. It’s fair to say that most would be happy with a 257% gain during this time. We believe it is more important to focus on long-term returns than on short-term returns. Of course, that doesn’t necessarily mean it’s cheap now.

Although Wipro lost ₹392 billion of its market capitalization this week, let’s take a look at its longer-term fundamental trends and see if they have generated any returns.

See our latest review for Wipro

To paraphrase Benjamin Graham: in the short term, the market is a voting machine, but in the long term, it is a weighing machine. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

In half a decade, Wipro has managed to grow its earnings per share by 11% per year. This EPS growth is less than the average annual share price increase of 29%. It is therefore fair to assume that the market has a better opinion of the company than five years ago. And that’s hardly shocking given the track record of growth.

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

NSEI: WIPRO Earnings Per Share Growth January 17, 2022

We consider it positive that insiders have made significant purchases over the past year. That said, most people consider profit and revenue growth trends to be a more meaningful guide to the business. This free Wipro’s Interactive Earnings, Revenue and Cash Flow Report is a great place to start if you want to dig deeper into the stock.

What about dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price performance. While the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital raising or spin-offs. off updated. It can be said that the TSR gives a more complete picture of the return generated by a stock. We note that for Wipro the TSR over the last 5 years was 263%, which is better than the share price return mentioned above. This is largely the result of its dividend payments!

A different perspective

Good to see that Wipro has rewarded its shareholders with a total shareholder return of 46% over the past twelve months. Of course, this includes the dividend. As the one-year TSR is better than the five-year TSR (the latter standing at 29% per year), it seems that the stock’s performance has improved lately. At best, this may hint at genuine trading momentum, implying that now could be a great time to dig deeper. It is always interesting to follow the evolution of the share price over the long term. But to better understand Wipro, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 1 warning sign with Wipro, and understanding them should be part of your investment process.

There are many other companies whose insiders buy shares. You probably do not want to miss this free list of growing companies insiders are buying.

Please note that the market returns quoted in this article reflect the average market-weighted returns of the stocks currently trading on the IN exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.