Not the best quarter Indian Tourism Finance Corporation Limited (NSE:TFCILTD) shareholders, as the share price has fallen 23% in that time. In contrast, the three-year gains were impressive. In fact, the stock price is up 160% from where he was three years ago. It's not uncommon for stock prices to rally a bit after a big rally. Ultimately, underlying performance will determine whether a top company will enter or whether this is a great buying opportunity.
Long-term performance is good, but with a recent decline of 11%, let's see if the fundamentals are in line with the stock price.
Check out our latest analysis for Tourism Finance Corporation of India.
Markets are powerful pricing mechanisms, but stock prices reflect not only underlying business performance but also investor sentiment. One imperfect but simple way to consider how the market perception of a company has changed is to compare the change in the earnings per share (EPS) with the share price movement.
Tourism Finance Corporation of India was able to grow its EPS by 3.7% per annum over three years, driving the share price higher. By comparison, the 37% annual increase in the share price has outpaced the EPS growth. This suggests the market is feeling more optimistic about the stock after its progress over the past few years. It's common for investors to become enamored with a business after several years of steady progress.
The company's earnings per share (long-term) are depicted in the image below (click to see the exact numbers).
this free This interactive report on Tourism Finance Corporation of India's earnings, revenue and cash flow is a great starting point, if you want to investigate the stock further.
What will happen to the dividend?
It's important to consider not only the share price return, but also the total shareholder return for a particular stock. 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 increases and spin-offs. So for companies that pay a generous dividend, the TSR is often much higher than the share price return. Coincidentally, Tourism Finance Corporation of India's TSR over the last three years was 175%, which is higher than the share price return mentioned above. This is primarily due to dividend payments.
different perspective
It's good to see that Government of India Tourism Finance Corporation shareholders received a total shareholder return of 124% in the last year. That includes dividends. This is better than the 9% annualized return over the past five years, suggesting that the company has performed well of late. Given the share price momentum remains strong, it might be worth taking a closer look at the stock to make sure you don't miss out. It's always interesting to track stock performance over the long term. However, to understand Tourism Finance Corporation of India better, you need to consider many other factors.Case in point: we discovered 5 warning signs for Tourism Finance Corporation of India One of them is not very favorable to us.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Indian exchanges.
Valuation is complex, but we help make it simple.
Check out our comprehensive analysis of whether Tourism Finance Corporation of India is potentially overvalued or undervalued. Fair value estimates, risks and caveats, dividends, insider trading, and financial health.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
