Shareholders might be concerned that the Sunny Optical Technology (Group) Company Limited (HKG:2382) share price down 12% last month. 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 267% gain during this time. Generally speaking, long-term returns will give you a better idea of ​​the quality of the business than short-term ones. Only time will tell if there is still too much optimism currently reflected in the stock price. Unfortunately, not all shareholders will have held onto it for the long term, so spare a thought for those caught up in the 19% decline over the past twelve months.

So let’s examine and see if the long-term performance of the business has been consistent with the progress of the underlying business.

See our latest analysis for Sunny Optical Technology (Group)

While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. An imperfect but reasonable way to gauge changing sentiment around a company is to compare earnings per share (EPS) with the stock price.

Over five years of share price growth, Sunny Optical Technology (Group) has achieved compound earnings per share (EPS) growth of 44% per annum. The EPS growth is more impressive than the 30% annual share price gain over the same period. So it seems that the market is not so enthusiastic about the title these days.

You can see below how the EPS has evolved over time (find out the exact values ​​by clicking on the image).

SEHK: 2382 Earnings per share growth February 14, 2022

We are pleased to report that the CEO is compensated more modestly than most CEOs of similarly capitalized companies. But while it’s still worth checking out CEO compensation, the really important question is whether the company can increase its profits in the future. It might be interesting to take a look at our free Sunny Optical Technology (Group) earnings, revenue and cash flow report.

What about dividends?

In addition to measuring share price performance, investors should also consider total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital increases, as well as any dividends, assuming the dividends are reinvested. It can be said that the TSR gives a more complete picture of the return generated by a stock. It turns out that the TSR of Sunny Optical Technology (Group) for the past 5 years was 279%, which exceeds the share price return mentioned earlier. This is largely the result of its dividend payments!

A different perspective

While the broader market lost around 15% in the twelve months, Sunny Optical Technology (Group) shareholders fared even worse, losing 18% (even including dividends). However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Longer-term investors wouldn’t be so upset, as they would have gained 31%, every year, over five years. If fundamentals continue to point to sustainable long-term growth, the current sell-off could be an opportunity to consider. While it’s worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. For example, we found 1 warning sign for Sunny Optical Technology (Group) which you should be aware of before investing here.

Sure Sunny Optical Technology (Group) may not be the best stock to buy. So you might want to see this free collection of growth values.

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