Those who invested in Sanofi (EPA: SAN) three years ago are up 37%
Buying a low cost index fund will get you the average market return. But if you invest in individual stocks, some are likely to underperform. This is what happened with the Sanofi (EPA: SAN) share price. It’s up 22% over three years, but it’s below market performance. Zooming in, the action has increased by a respectable 12% over the past year.
So let’s assess the underlying fundamentals over the past 3 years and see if they have moved in line with shareholder returns.
Discover our latest analysis for Sanofi
In his essay Graham-and-Doddsville super-investors Warren Buffett described how stock prices don’t always rationally reflect a company’s value. 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).
Sanofi was able to increase its EPS by 15% per year over three years, driving up the share price. This EPS growth is greater than the 7% average annual increase in the share price. So it appears that investors have become more cautious of the company over time.
You can see below how the EPS has evolved over time (see the exact values by clicking on the image).
Dive deeper into Sanofi’s key metrics by viewing this interactive graph of Sanofi earnings, revenue and cash flow.
What about dividends?
In addition to measuring stock price performance, investors should also consider the total shareholder return (TSR). While the share price return reflects only the change in the share price, the TSR includes the value of dividends (assuming they have been reinvested) and the benefit of any capital increase or spin-off. updated. It’s fair to say that the TSR gives a more complete picture of dividend paying stocks. As it turns out, Sanofi’s TSR over the past 3 years was 37%, which exceeds the share price return mentioned above. The dividends paid by the company thus boosted the total shareholder return.
A different perspective
Sanofi has provided a TSR of 16% over the past twelve months. But it was below the market average. On the bright side, it’s still a payoff, and it’s actually better than the 7% average return over half a decade. It is possible that returns will improve with company fundamentals. It is always interesting to follow the evolution of stock prices over the long term. But to better understand Sanofi, there are many other factors that we need to consider. For example, we discovered 1 warning sign for Sanofi which you need to know before investing here.
We’ll like Sanofi more if we see big insider buys. In the meantime, watch this free list of growing companies with significant and recent insider buying.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on FR stock exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.