Those who invested in Infineon Technologies (ETR:IFX) three years ago are up 65% – Yahoo Finance
By buying an index fund, you can roughly match the market return with ease. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, the Infineon Technologies AG (ETR:IFX) share price is up 60% in the last three years, clearly besting the market decline of around 2.9% (not including dividends).
Now it’s worth having a look at the company’s fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Infineon Technologies
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).
During three years of share price growth, Infineon Technologies achieved compound earnings per share growth of 29% per year. This EPS growth is higher than the 17% average annual increase in the share price. So one could reasonably conclude that the market has cooled on the stock.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Infineon Technologies’ earnings, revenue and cash flow.
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Infineon Technologies’ TSR for the last 3 years was 65%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
While the broader market lost about 12% in the twelve months, Infineon Technologies shareholders did even worse, losing 19% (even including dividends). Having said that, it’s inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. On the bright side, long term shareholders have made money, with a gain of 8% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before deciding if you like the current share price, check how Infineon Technologies scores on these 3 valuation metrics.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
Related Quotes
When we invest, we're generally looking for stocks that outperform the market average. And the truth is, you can make…
Forbo Holding AG ( VTX:FORN ), is not the largest company out there, but it received a lot of attention from a…
Graham Stephan is a finance expert with a popular YouTube channel. Recently, he tweeted out some important advice that everyone should read about the best investment you can currently make. Here's what Stephan had to say.
It is doubtless a positive to see that the Tilly's, Inc. ( NYSE:TLYS ) share price has gained some 45% in the last…
What underlying fundamental trends can indicate that a company might be in decline? More often than not, we'll see a…
If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost…
There is arguably no more thrilling player at this World Cup than Kylian Mbappe, who leads France into their last-16 clash on Sunday with a Poland side whose own hopes of pulling off a famous upset will depend to a large extent on Robert Lewandowski.
In this article, we discuss the 13 best bear market stocks to buy now. If you want to see more stocks in this selection, go directly to the 5 Best Bear Market Stocks To Buy Now. Since the start of 2022, the S&P 500 Index has observed a decline of 15.5%. The index also remained […]
Bad is good and good is bad. No, that’s not an extract from Orwell’s 1984, but rather the stock market’s view of the jobs market at the end of 2022. Friday’s better-than-expected jobs numbers put a spanner in the works for investors hoping the Fed will start easing its aggressive monetary stance when it convenes midway through the month to decide on its course of action. A strong jobs market is the opposite of what the Fed is looking for as it continues in its efforts to tame inflation. Therefor
Cloud computing is a massive industry right now and still growing, with an estimated market size of $1.5 trillion by 2030, according to Grand View Research. Lots of tech companies have their hands in cloud computing these days, so where should investors even begin? Two great places to start are with The Trade Desk (NASDAQ: TTD) and Amazon (NASDAQ: AMZN).
Leaving these accounts open could tarnish your golden years.
The action by the $15 billion Starwood Real Estate Income Trust came after elevated withdrawal requests and follows a similar move by a Blackstone REIT
FTX’s founder said he couldn’t explain what happened to billions of dollars that customers of his failed cryptocurrency exchange sent to the bank accounts of his trading firm.
(Bloomberg) — Chinese markets rallied with the yuan strengthening past a key level, as the authorities accelerated a shift toward reopening the economy and more investors get bullish. Most Read from BloombergChina’s Covid Pivot Accelerates as Cities Ease Testing RulesOPEC+ Pauses as Russia Sanctions and China Covid Rules Roil Crude MarketsOPEC+ Latest: Group Agrees to Keep Oil Production UnchangedElon Musk Says Apple Is ‘Fully’ Advertising on Twitter AgainThis Stock Strategist Says We’ll See 5%
Will Healy (MercadoLibre): MercadoLibre could prosper in 2023 on its antifragility. One example of MercadoLibre's antifragility is how it makes e-commerce possible in its region. To succeed, MercadoLibre has to reach customers who do not hold bank accounts or credit cards.
These three stocks all boast high yields, but one looks like the best option for dividend investors.
Five Wall Street analysts give their hot takes on the prospects for the big-box retailer's stock.
Ford Motor Company (NYSE: F), Devon Energy (NYSE: DVN), and Baker Hughes (NASDAQ: BKR) stand out as three dirt-cheap dividend stocks to buy now. Daniel Foelber (Ford Motor Company): Ford stock is down nearly 44% from its all-time high set near the start of 2022. As the economy weakens and consumer spending falls, car companies run into trouble.
Salesforce (NYSE: CRM) posted its latest quarterly report on Nov. 30. Its adjusted earnings increased 10% to $1.40 per share and also cleared the consensus forecast by $0.18. Salesforce's growth rates seemed stable, but they didn't impress the bulls.
To get a sense of who is truly in control of Bank of America Corporation ( NYSE:BAC ), it is important to understand…