Intertape Polymer Group Inc. Shareholders (TSE: ITP) saw the share price drop 10% during the month. But looking back from last year, the feedback has been quite satisfactory! Namely, he had solidly beaten the market, up 82%.
In light of the stock’s 3.9% drop over the past week, we want to look at the longer-term story and see if fundamentals have been driving the company’s positive performance on a year.
Check out our latest review for Intertape Polymer Group
In his essay Graham-and-Doddsville super-investors Warren Buffett described how stock prices don’t always rationally reflect a company’s value. By comparing earnings per share (EPS) and changes in the share price over time, we can get a sense of how investors’ attitudes towards a company have changed over time.
Intertape Polymer Group has been able to increase its EPS by 45% over the past twelve months. This EPS growth is significantly lower than the 82% increase in the share price. It is therefore fair to assume that the market has a better opinion of the company than a year ago.
The image below shows how EPS has tracked over time (if you click on the image you can see more detail).
We consider it positive that insiders have made significant purchases over the past year. Even so, future profits will be much more important to whether current shareholders make money. It might be worth taking a look at our free Intertape Polymer Group earnings, revenue and cash flow report.
What about dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. TSR is a yield calculation that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of any discounted capital increase and spinoff. So, for companies that pay a generous dividend, the TSR is often much higher than the return on the share price. As it turns out, Intertape Polymer Group’s TSR for the past year was 88%, which exceeds the share price return mentioned above. The dividends paid by the company thus boosted the total shareholder return.
A different perspective
It is nice to see that Intertape Polymer Group shareholders have received a total shareholder return of 88% over the past year. And that includes the dividend. As the 1-year TSR is better than the 5-year TSR (the latter standing at 9% per year), it seems that the stock’s performance has improved in recent times. Someone with an optimistic outlook might view the recent improvement in TSR as indicating that the business itself is improving over time. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we have identified 2 warning signs for Intertape Polymer Group that you need to be aware of.
If you like to buy stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on CA exchanges.
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 shares 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 the mentioned stocks.
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